Big Pickup Sales slide
07-02-2004, 01:08 PM
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Big Pickup Sales slide
Truck sales slide stalls GM, Ford
May's heavy incentives hurt June sales Chrysler bucks trend, sales improve
By Brett Clanton / The Detroit News
After five consecutive monthly sales gains, U.S. new car and truck demand slipped 2 percent in June, with General Motors Corp. and Ford Motor Co. down sharply, but DaimlerChrysler AG’s Chrysler Group posting healthy gains.
The nosedive by GM and Ford was a discouraging sign after the industry beat back the threat of rising gas prices with a 3.4 percent sales jump in May.
At GM, June sales dropped 12 percent, with car and truck sales each down 12 percent. A 17 percent drop in car demand hurt Ford, where June sales slipped 8 percent.
Top Japanese and Korean automakers — Toyota, Honda, Nissan, Hyundai and Kia — all posted solid sales last month and helped Asian automakers grab 34.5 percent of the U.S. market, up from 31.3 percent in June 2003.
Because sales in May were so strong, June’s performance looked even weaker by comparison.
Despite June’s slip, automakers remain optimistic that growing consumer confidence and an improving job picture will generate higher sales the rest of the year.
Through June, industry sales are up 2.3 percent this year.
Still, GM, Ford and Chrysler are expected to offer new discounts or expand existing incentive deals to keep customers interested and reduce growing stockpiles of some models.
Automakers are counting on the introduction of more than 50 new models this year to entice customers into showrooms.
Chrysler, for example, was lifted in June by surging sales of its new 300 Series sedan and Dodge Durango SUV. Those vehicles have helped Chrysler post sales increases in eight of the last nine months. Sales of the redesigned Dodge Grand Caravan minivan — with second and third row seating that folds flat into the floor — also jumped 7 percent in June.
Though overall sales of the automaker’s Jeep brand fell 1.1 percent, the Chrysler brand surged with a 13.5 percent gain and Dodge improved by 3.6 percent.
Chrysler already has launched seven of nine vehicles planned for this year as part of an effort to restore the company to profitability. A new Jeep Grand Cherokee SUV and Dodge Dakota pickup come out this fall.
“With a bunch of new product, we think we’ll compete very well,” said Gary Dilts, Chrysler’s senior vice president of sales.
Chrysler’s success is coming “as a result of selling vehicles the old-fashioned way,” said Paul Taylor, chief economist for the National Automobile Dealers Association. “By bringing out tremendously attractive products that also offer good value.”
Ford was pulled down in June by a drop in commercial fleet sales and a softening of its mighty full-size truck business.
Sales of the automaker’s F-series pickup, the nation’s best selling vehicle, increased by only 1.3 percent. It was the smallest monthly sales gain for the truck since Ford launched the 2004 model replacement in November.
A 10.9 percent gain for the mid-size Escape SUV and a 6.3 percent rise in Ford Focus sales weren’t enough to keep the Ford brand from slipping by 8 percent in June. The company’s Lincoln brand also fell by 13.3 percent, while the Mercury brand inched up by 2.4 percent, according to Autodata Corp.
George Pipas, Ford’s chief sales analyst, said the automaker is looking for stronger sales in the second half of 2004 with the introduction of several new models, including the Five Hundred sedan and Freestyle wagon.
“Our goal is to get retail market share back close to even by the end of the year,” he said, alluding to a 5 percent drop in retail business since January.
Ford’s inventory at the end of June was a “little high” at 950,000 units, Pipas said. The automaker’s production schedule remains unchanged for the third quarter. Still, five Ford plants will extend a normal two-week summer shutdown period and close shop for three weeks, he said.
Of Detroit’s Big Three, GM saw the most dramatic drop in June, as sales plunged at the automaker’s Buick, Chevrolet, GMC, Pontiac, Hummer and Saturn divisions.
Only GM’s Cadillac brand improved sales last month, turning in a 14 percent gain on strong sales of the Escalade SUV.
“Quite simply, June was tough,” said Paul Ballew, GM’s executive director of market and industry analysis. He blamed the poor showing, in part, on tough month-over-month comparisons with May and stressed the need for improvement during the second half of the year.
“We’re going to have to pick up the pace,” he said.
GM and Ford will announce new rebate programs on Tuesday, while Chrysler dealers were told Thursday the automaker will extend current discount programs through July and August.
Though the economy is showing strong signs of recovery, with consumer confidence hitting a two-year high in June and the nation adding 1.4 million new jobs since last August, Detroit automakers are still stuck offering deep discounts on new cars and trucks, the NADA’s Taylor said.
“There’s frustration for the Big Three that they can’t scale back incentives even as the economy improves,” he said. But he added: “Incentives will increase and help move the products manufacturers need to move.”
The need to move product was made all the more urgent in June, as Asian manufacturers continued to eat away sales from the Big Three.
Among the leading Japanese manufacturers, Nissan Motor Co. saw the biggest increase last month, jumping 13.5 percent with the help of new products such as the full-size Titan pickup, which introduced the automaker to a new vehicle segment. Toyota Motor Co.p. was up 9.6 percent, while Mazda Motor Corp. rose 6.1 percent and Honda gained 5.6 percent.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
May's heavy incentives hurt June sales Chrysler bucks trend, sales improve
By Brett Clanton / The Detroit News
After five consecutive monthly sales gains, U.S. new car and truck demand slipped 2 percent in June, with General Motors Corp. and Ford Motor Co. down sharply, but DaimlerChrysler AG’s Chrysler Group posting healthy gains.
The nosedive by GM and Ford was a discouraging sign after the industry beat back the threat of rising gas prices with a 3.4 percent sales jump in May.
At GM, June sales dropped 12 percent, with car and truck sales each down 12 percent. A 17 percent drop in car demand hurt Ford, where June sales slipped 8 percent.
Top Japanese and Korean automakers — Toyota, Honda, Nissan, Hyundai and Kia — all posted solid sales last month and helped Asian automakers grab 34.5 percent of the U.S. market, up from 31.3 percent in June 2003.
Because sales in May were so strong, June’s performance looked even weaker by comparison.
Despite June’s slip, automakers remain optimistic that growing consumer confidence and an improving job picture will generate higher sales the rest of the year.
Through June, industry sales are up 2.3 percent this year.
Still, GM, Ford and Chrysler are expected to offer new discounts or expand existing incentive deals to keep customers interested and reduce growing stockpiles of some models.
Automakers are counting on the introduction of more than 50 new models this year to entice customers into showrooms.
Chrysler, for example, was lifted in June by surging sales of its new 300 Series sedan and Dodge Durango SUV. Those vehicles have helped Chrysler post sales increases in eight of the last nine months. Sales of the redesigned Dodge Grand Caravan minivan — with second and third row seating that folds flat into the floor — also jumped 7 percent in June.
Though overall sales of the automaker’s Jeep brand fell 1.1 percent, the Chrysler brand surged with a 13.5 percent gain and Dodge improved by 3.6 percent.
Chrysler already has launched seven of nine vehicles planned for this year as part of an effort to restore the company to profitability. A new Jeep Grand Cherokee SUV and Dodge Dakota pickup come out this fall.
“With a bunch of new product, we think we’ll compete very well,” said Gary Dilts, Chrysler’s senior vice president of sales.
Chrysler’s success is coming “as a result of selling vehicles the old-fashioned way,” said Paul Taylor, chief economist for the National Automobile Dealers Association. “By bringing out tremendously attractive products that also offer good value.”
Ford was pulled down in June by a drop in commercial fleet sales and a softening of its mighty full-size truck business.
Sales of the automaker’s F-series pickup, the nation’s best selling vehicle, increased by only 1.3 percent. It was the smallest monthly sales gain for the truck since Ford launched the 2004 model replacement in November.
A 10.9 percent gain for the mid-size Escape SUV and a 6.3 percent rise in Ford Focus sales weren’t enough to keep the Ford brand from slipping by 8 percent in June. The company’s Lincoln brand also fell by 13.3 percent, while the Mercury brand inched up by 2.4 percent, according to Autodata Corp.
George Pipas, Ford’s chief sales analyst, said the automaker is looking for stronger sales in the second half of 2004 with the introduction of several new models, including the Five Hundred sedan and Freestyle wagon.
“Our goal is to get retail market share back close to even by the end of the year,” he said, alluding to a 5 percent drop in retail business since January.
Ford’s inventory at the end of June was a “little high” at 950,000 units, Pipas said. The automaker’s production schedule remains unchanged for the third quarter. Still, five Ford plants will extend a normal two-week summer shutdown period and close shop for three weeks, he said.
Of Detroit’s Big Three, GM saw the most dramatic drop in June, as sales plunged at the automaker’s Buick, Chevrolet, GMC, Pontiac, Hummer and Saturn divisions.
Only GM’s Cadillac brand improved sales last month, turning in a 14 percent gain on strong sales of the Escalade SUV.
“Quite simply, June was tough,” said Paul Ballew, GM’s executive director of market and industry analysis. He blamed the poor showing, in part, on tough month-over-month comparisons with May and stressed the need for improvement during the second half of the year.
“We’re going to have to pick up the pace,” he said.
GM and Ford will announce new rebate programs on Tuesday, while Chrysler dealers were told Thursday the automaker will extend current discount programs through July and August.
Though the economy is showing strong signs of recovery, with consumer confidence hitting a two-year high in June and the nation adding 1.4 million new jobs since last August, Detroit automakers are still stuck offering deep discounts on new cars and trucks, the NADA’s Taylor said.
“There’s frustration for the Big Three that they can’t scale back incentives even as the economy improves,” he said. But he added: “Incentives will increase and help move the products manufacturers need to move.”
The need to move product was made all the more urgent in June, as Asian manufacturers continued to eat away sales from the Big Three.
Among the leading Japanese manufacturers, Nissan Motor Co. saw the biggest increase last month, jumping 13.5 percent with the help of new products such as the full-size Titan pickup, which introduced the automaker to a new vehicle segment. Toyota Motor Co.p. was up 9.6 percent, while Mazda Motor Corp. rose 6.1 percent and Honda gained 5.6 percent.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
07-02-2004, 01:12 PM
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Related article:
Big truck demand tumbles
GM takes hardest hit in June among U.S. automakers
By Ed Garsten / The Detroit News
DETROIT — Some of the auto industry’s money wagons — high-profit full-size pickup trucks and sport utility vehicles — are starting to fall out of favor as consumers migrate to other types of vehicles, analysts say.
Hardest hit is General Motors Corp., which saw sales of several full-size pickups and SUVs nosedive in June compared with a year ago.
While sales of the GMC Sierra pickup inched up, its twin, the Chevrolet Silverado, suffered an 8.1 percent drop in sales last month.
Sales of the Chevrolet Tahoe SUV fell 23.5 percent last month while demand dropped 13 percent for the GMC Yukon and 23.9 percent for the Yukon XL.
The June decline in GM’s full-size truck sales was shared by its domestic rivals, but to a lesser degree. Sales of Ford Motor Co.’s F-series pickups rose 1.3 percent last month, but demand for the Expedition SUV dipped 0.7 percent and the giant Excursion SUV saw its sales drop 10.7 percent. At DaimlerChrysler AG’s Chrysler Group, Dodge Ram pickup sales slipped 3.7 percent in June.
Among foreign manufacturers, Toyota Motor Co. reported sales of its Sequoia full-size SUV fell 16.6 percent.
For the year, demand for many large SUVs and pickups is flat or down, while overall light vehicle sales are up 2.3 percent. Lincoln Navigator sales, for instance, are off 8 percent this year.
Analysts say consumers are switching to new entries, such as Nissan Motor Co.’s Titan pickup and Armada SUV. In other cases, they are moving on to other types of vehicles.
“There’s a lot of migration to crossover vehicles,” said Art Spinella, who heads Bandon, Ore.-based CNW Marketing and Research. “They’re also looking at a lot of new stuff like the Dodge Magnum.”
In GM’s case, consumers may simply be getting tired of the automaker’s aging full-size lineup, which is not due to be replaced until 2006 and 2007, according to Deutsche Bank analyst Rod Lache.
The result could be a significant hit to GM’s bottom line.
“These products account for the majority of GM’s North American profits,” Lache wrote in a report to investors this week. “We believe that GM’s North American business may not stay profitable for long.”
CNW’s Spinella says a stale product line is a poison pill that pickup truck buyers won’t swallow.
“There is a sizable percentage of pickup truck buyers who have money to buy pickups more frequently,” said Spinella. “That’s what makes the pickup market so lucrative, but the automakers have to change the vehicles more often.”
Paul Ballew, GM’s executive director of market and industry analysis, said the company is still upbeat about its prospects in the truck market, noting the automaker’s overall light truck sales are up 3 percent this year, compared with the January-June period a year ago.
“For trucks, it was not a great month,” said Ballew, “but certainly a plus for us for the year as a whole, a very solid first half.”
Indeed, despite the slump in sales of full-size trucks, the Ford F-series, Chevy Silverado and Dodge Ram pickups remained the top three selling vehicles in June.
You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com.
Big truck demand tumbles
GM takes hardest hit in June among U.S. automakers
By Ed Garsten / The Detroit News
DETROIT — Some of the auto industry’s money wagons — high-profit full-size pickup trucks and sport utility vehicles — are starting to fall out of favor as consumers migrate to other types of vehicles, analysts say.
Hardest hit is General Motors Corp., which saw sales of several full-size pickups and SUVs nosedive in June compared with a year ago.
While sales of the GMC Sierra pickup inched up, its twin, the Chevrolet Silverado, suffered an 8.1 percent drop in sales last month.
Sales of the Chevrolet Tahoe SUV fell 23.5 percent last month while demand dropped 13 percent for the GMC Yukon and 23.9 percent for the Yukon XL.
The June decline in GM’s full-size truck sales was shared by its domestic rivals, but to a lesser degree. Sales of Ford Motor Co.’s F-series pickups rose 1.3 percent last month, but demand for the Expedition SUV dipped 0.7 percent and the giant Excursion SUV saw its sales drop 10.7 percent. At DaimlerChrysler AG’s Chrysler Group, Dodge Ram pickup sales slipped 3.7 percent in June.
Among foreign manufacturers, Toyota Motor Co. reported sales of its Sequoia full-size SUV fell 16.6 percent.
For the year, demand for many large SUVs and pickups is flat or down, while overall light vehicle sales are up 2.3 percent. Lincoln Navigator sales, for instance, are off 8 percent this year.
Analysts say consumers are switching to new entries, such as Nissan Motor Co.’s Titan pickup and Armada SUV. In other cases, they are moving on to other types of vehicles.
“There’s a lot of migration to crossover vehicles,” said Art Spinella, who heads Bandon, Ore.-based CNW Marketing and Research. “They’re also looking at a lot of new stuff like the Dodge Magnum.”
In GM’s case, consumers may simply be getting tired of the automaker’s aging full-size lineup, which is not due to be replaced until 2006 and 2007, according to Deutsche Bank analyst Rod Lache.
The result could be a significant hit to GM’s bottom line.
“These products account for the majority of GM’s North American profits,” Lache wrote in a report to investors this week. “We believe that GM’s North American business may not stay profitable for long.”
CNW’s Spinella says a stale product line is a poison pill that pickup truck buyers won’t swallow.
“There is a sizable percentage of pickup truck buyers who have money to buy pickups more frequently,” said Spinella. “That’s what makes the pickup market so lucrative, but the automakers have to change the vehicles more often.”
Paul Ballew, GM’s executive director of market and industry analysis, said the company is still upbeat about its prospects in the truck market, noting the automaker’s overall light truck sales are up 3 percent this year, compared with the January-June period a year ago.
“For trucks, it was not a great month,” said Ballew, “but certainly a plus for us for the year as a whole, a very solid first half.”
Indeed, despite the slump in sales of full-size trucks, the Ford F-series, Chevy Silverado and Dodge Ram pickups remained the top three selling vehicles in June.
You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com.
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