June US auto sales: GM takes the leading position

The month of June has been terrible for the American automakers as they observed their sales further went down. Interestingly, GM took the leading position in the USA in car sales over Toyota Motor Corporation (TYO: 7203). Still, sales of GM dropped by 18.2%. Another good news is that GM observed more than 2% rise in its share prices on July 1^st after hitting their lowest point in the last fifty years on 30^th June. GM (NYSE:GM) reported that it sold 262,329 vehicles in June compared with Toyota’s 193,234. In June GM’s car sales fell 21% and in the first six months, overall sales went down by 16.3%. On the other hand, Toyota’s sales fell 6.8% in the first six months.

In June, car sales of Toyota fell 9.4% and truck sales dropped 38.8%. Ford sales dropped 28% and Chrysler 35.9%.

In 2007 Toyota Motor Corporation almost caught GM in car sales but took over in vehicle production. In the first quarter of 2008 Toyota took the sales lead.

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Toyota outsales GM in June but there is nothing to be happy about it

Toyota Motor Corporation(TYO: 7203), the largest automaker of Japan will over take General Motors Corporation(NYSE:GM) in the monthly US sales in June but there is nothing to be happy about it as the US economic slowdown is still continuing and the automaker is struggling with downward auto sales. Auto industry experts and analysts are expecting another “double digit dip” in auto sales in June.

Higher fuel price, weak economy, and lower consumer confidence has resulted into switching over small fuel efficient cars and cross over vehicles. This has proved to be a boon for the Japanese automakers like Toyota Motor Corporation and Honda Motor Company Limited (TYO: 7267) that depends less on the sales of trucks and SUVs like the three largest American vehicle makers: GM, Ford and Chrysler.

Still, Toyota is experiencing its share of problems. The company is hardly keeping up with the high demand of its Hybrid Prius. More over, it has cut down its pickup and light truck production.

Famous marketing consulting firm, J.D. Power and Associates, is predicting that, with continuation of the present trend, the ‘annualized sales rate’ for June would be 12.5 million vehicles ; the lowest monthly sales since 1992.

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Honda and Toyota beats Ford in the May USA car sales

After General Motors Corporation (NYSE:GM), it’s Ford’s term. The second largest car maker in the USA took a big blow in May car sales from Japanese auto-giants: Honda and Toyota. As the USA consumers are switching toward fuel efficient Japanese cars, Honda Motor Company’s (TYO: 7267) Civic Accord and Toyota Motor Corporation’s (TYO: 7203) Corolla and Camry enjoyed higher sales to Ford Motor Company’s (NYSE:F) F-Series pickups. According to Honda spokesperson Chris Martin, in May, Honda sold 53,229 Civics and 43,778 Accords. Toyota on the other hand sold 52,826 Corollas and 51,291 Camrys. Bloomberg reports:

The second-largest U.S.-based automaker sold more Focus small cars than F-Series pickups to individual consumers, Farley also said. Those so-called retail sales usually are more profitable than those to business and government fleets that get discounts for buying in bulk.

The F-Series still beat the Focus in total sales because of fleet purchases. Ford sold 32,579 Focus cars last month, an increase of 53 percent from a year earlier, while the F-Series total was a 31 percent drop. Ford's total sales fell 16 percent last month, its sixth straight monthly decline.

Declining pickup sales contributed to Ford's announcement last month that it would abandon a target of returning to profit by next year. The company had combined losses of $15.3 billion in 2006 and 2007, mostly because of its North American unit.

For the first time in last fifteen years, any foreign auto maker topped Ford in car sales. For the first time also, Honda’s Civic has become the best-selling car in the USA. According to Ford’s marketing chief, Jim Farley, it was a watershed month. The people of USA are paying $4.20 gas for the first time.

The main problem is USA car makers are good at making heavy vehicles that take lots of fuel. Success of Japanese car makers is a big sign of change for the USA car industry. From now on, they should go for producing small fuel efficient cars to survive in the extremely competitive auto market.

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Ford, GM, Chrysler are losing market to Honda and Toyota

Honda Motor Company (TYO: 7267) is trying to make a turn around with its hybrid models and this means more loss of market shares for American automakers especially, the famous ‘Detroit Three.’ In 2009, Honda Motor Company is planning to release hybrid models that will cost only$1900 (€1,206). Honda is also planning to bring out the hybrid version of its popular Fit subcompact vehicle. Jesse Toprak, chief industry analyst, Edmunds.com referred Honda’s strategy as a ‘game-changer for the short term’. Currently, Honda has the most fuel-efficient car models in the USA market. The company will sell its new hybrid only cars in USA, Japan, and Europe from next year but it has not determined anything about the Fit subcompact hybrid. International Herald Tribune reports:

In addition to the new model and the Fit, Honda will introduce several other hybrids: a Civic and a new sporty model based on the CR-Z, Fukui said.

Fukui refused to give the price for the new hybrid-only vehicle.

But he said the difference between hybrids and their comparable standard models should be kept within 200,000 yen ($1,900, €1,206), although such price gaps can now reach as much as 500,000 yen ($4,800, €3,047).

"The 200,000 yen difference is a must," Fukui said.

Hybrids deliver a cleaner, more efficient ride by switching between a gas engine and an electric motor at different speeds, and by recycling the energy the car produces as it moves.

Honda aims at selling 200,000 ‘entry-level’ hybrid cars every year. To make the cars cheaper, the company has introduced a new electronic control unit and thinner and more compact battery. It is also developing a thinner motor.

North American car companies are good at making big vehicles like trucks and SUVs. With the rising cost of fuel American people are shifting towards smaller fuel-efficient cars.

Michael Robinet, vice president, Global Forecast Services for CSM Worldwide, an auto industry consulting company in Northville, says that GM and Ford could rely on their European and Asian operations for small car expertise. Chrysler has joined with Nissan to release small cars by 2010. GM is focusing on its larger hybrid vehicles and plug-in car Chevrolet Volt which will be released in 2010. Ford is planning to release midsize hybrids next year.

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Nissan Motor Company: Aiming for emerging markets

Nissan Motor Company’s CEO Carlos Ghosn told the reporters on Thursday that the car market in most of the developed countries would stabilize by 2010. He said that auto makers should focus on emerging markets. According to Ghosn, US auto market will experience recession in 2008 and stabilize by 2009-10. Reuters reports:

"Japan at best will see stagnation, West Europe at best stagnation, the U.S. is slumping in 2008 and at best in 2009-2010, we will see stabilisation," he told a news conference.

"The growth will come from emerging markets."

Ghosn, also head of Nissan's majority shareholder Renault SA (RENA.PA: Quote, Profile, Research), repeated that the two companies remained open to expanding their alliance to a third member but that they were in no rush.

Two years ago, billionaire investor Kirk Kerkorian proposed an alliance with General Motors Corporation. Nissan’s recent deal with Chrysler again sparked the alliance rumor but Ghosn said that it was an OEM (original equipment manufacturing) deal.

Japan’s third largest auto maker is now entering the next phase of its business. On May 13, it will disclose its new five year business plan. Carlos did not disclose any detail but he said that the company is re-engineered and restructured and now it is ready to compete again.

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