U.S. auto sales tumbled in June as the economy remained a deep concern for consumers, but Ford Motor Co posted far better results than other large automakers and shot ahead of Detroit rivals passing through federally sponsored bankruptcies.
Automakers said the results pointed to more stability for the economy, but fell short of marking a turnaround for the battered U.S. auto market after a punishing four-year decline.
Ford, the only U.S. automaker not supported by emergency U.S. government funding, reported a 10.9 percent drop in U.S. sales in June that was better than some analysts forecast.
The sales results came as General Motors Corp pleaded its case to the U.S. Bankruptcy Court to permit a swift sale of its best assets to a new company funded by the Obama administration and avoid liquidation.
GM posted a 33.6 percent decline in U.S. sales in June and sounded a more cautious tone about the economy than rivals in a conference call with analysts and reporters.
Our results are tenuous, said GM sales chief Mark LaNeve. Our customers are expecting a very quick exit from bankruptcy similar to what they saw for Chrysler.
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.
Honda Motor Co Ltd <7267.T>, which had posted strong U.S. sales a year earlier as a rise in gasoline prices drove demand for small cars, posted a 29.5 percent sales decline.
Nissan Motor Co Ltd <7201.T> posted a 23.1 percent drop and said there were some optimistic signs that demand had stabilized after a downward spiral after the financial market collapse in September.
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.
Some of the most bullish analysts and economists had expected industrywide U.S. sales to top the 10 million-unit annual rate in June for the strongest showing this year.
However, results from the largest automakers suggested that the industrywide sales had fallen just short of that mark, underscoring the continuing uncertainty in the largest market for cars amid the four-year downturn in sales.
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.
RECORD AUTO INCENTIVES
U.S. auto sales figures have been roiled in recent months by the GM and Chrysler bankruptcies. 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, further obscuring 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 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 and industry experts expect the new U.S. government cash for clunkers incentives to trade low-mileage vehicles for new cars to provide a moderate sales bounce in the latter half of the year.
Results were not adjusted for an extra selling day in June from a year earlier.
(Reporting by David Bailey and Kevin Krolicki, editing by Matthew Lewis)