Major automakers posted better U.S. auto sales for June than in recent months on Wednesday, led by Ford Motor Co as results pointed to signs of some stabilizing in the hard-hit industry.
Ford reported a 10.9 percent drop in U.S. sales in June, near the top of its expectations for a decline of from 10 to 20 percent, and Nissan Motor Co Ltd <7201.T> posted a 23.1 percent drop, in line with analysts' expectations.
Toyota Motor Corp <7203.T> posted a 31.9 percent sales decline in June. The automaker trailed Ford for second place in the U.S. market through the first half of 2009.
Chrysler Group LLC, in its first sales report following its sale to a group led by Italy's Fiat SpA in June, said U.S. June sales fell 42 percent.
Results were not adjusted for an extra selling day in June from a year earlier.
Industry analysts and experts expect U.S. auto industry sales to be down less than 30 percent in June, which would be the first time the year-over-year results were even that strong since the financial-market collapse in September.
In the context of the U.S. auto industry, where sales have been slumping for four years, that would constitute good news and support the view that sales are near bottom after a punishing decline to nearly 30-year lows.
I wouldn't say that the industry has done a 180 (degree turn), but I would say that in the last 60 days the industry has stabilized, Al Castignetti, general manager for Nissan in the United States, told Reuters in an interview.
Chrysler projected the June light vehicle annualized sales rate at 9.7 million vehicles, about the same as Ford, which expects a 10 million rate including medium- and heavy-duty trucks.
Economists follow the annualized rate of U.S. auto sales as an early snapshot of the appetite for big-ticket items. A 10 million-unit range would still be among the weakest results since the early 1980s.
Emily Kolinski-Morris, a Ford senior economist, said on a conference call the low end of Ford's 2009 range for industry vehicle sales, 10.5 million units, was well within reach.
General Motors Corp and Honda Motor Co Ltd <7267.T> and have yet to report results.
RECORD AUTO INCENTIVES
U.S. auto sales figures have been roiled in recent months by the bankruptcies at General Motors Corp and Chrysler. Chrysler cut ties to nearly 800 dealerships, winding down those relationships in early June.
Automakers also have been plying record incentives in the form of cash or special financing to press customer traffic into dealerships, making it more difficult to determine the long-term demand for vehicles.
Edmunds called the month the most expensive June on record, with the average U.S. incentive at $2,930 per vehicle sold, up 20 percent from a year earlier. Edmunds expects incentives to fall as production cuts in recent months pare inventories.
June incentives have never been higher, but we anticipate that the tide is about to turn, Edmunds executive director of industry analysis, Jesse Toprak, said in a statement.
Chrysler, which had the highest U.S. June incentive at $4,873 per vehicle according to Edmunds, halted production during its bankruptcy and GM has cut back substantially.
GM filed for bankruptcy protection on June 1 and opened a hearing into its proposed government-supported sale on Tuesday that would push its best assets to a new company and leave others behind to be liquidated.
GM plans to drop its Saab, Hummer, Saturn and Pontiac brands and focus on Chevrolet, GMC, Buick and Cadillac. The automaker has launched a sale from July 1 to July 6 that offers zero percent financing on most of its Pontiac brand.
The automaker also plans to terminate dealerships in its reorganization, but has favored a longer-term strategy of allowing the ties to expire gradually by October 2010.
Looking ahead, automakers and industry analysts expect a modest bump in U.S. auto sales from the cash for clunkers program signed into law last month, which begins to gear up later in July.
Analysts expect market distortions from the GM and Chrysler bankruptcies to begin to dissipate in the second half of 2009. They expect new U.S. government incentives to trade low-mileage vehicles for new cars to provide a moderate sales bounce in the latter half of the year.
(Reporting by David Bailey and Kevin Krolicki, editing by Matthew Lewis)