U.S. Auto Sales Fell 27% in June -- and That's Not a Bad Thing

GM Posts Best Month of Year; Ford Says Market Share Hits 16%

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DETROIT (AdAge.com) -- U.S. auto, car and truck sales in June dropped 27% vs. the same month a year ago, to 880,000 units. While that estimate, courtesy of Ford Motor Co., might not look so hot on its face, Ford's U.S. sales analyst George Pipas noted that the last time the U.S. industry's monthly sales fell less than 30% was September 2008 -- nine long months ago.

The improvement comes while Chrysler and General Motors Corp. are in bankruptcy and have cut spending -- GM quite drastically. "We're spending about half of what we did a year ago in terms of advertising," said Mark LaNeve, VP-vehicle sales, service and marketing in North America during the company's July 1 sales call with analysts. For example, unlike the first "Transformers" movie in 2007, which featured a yellow new Camaro as a main character, he said GM isn't spending any ad dollars advertising the film's sequel, which arrived last weekend and also features the so-called Bumblebee Camaro.

Best month of the year for GM
"Being in bankruptcy, [we] still kind of put up our best month of the year, so I really believe [we] executed extremely well from a marketing standpoint," Mr. LaNeve said. He cautioned, however, that "our position is tenuous. I believe part of the results are customers are expecting a very quick exit and emergence of the new company and very similar to what they saw for Chrysler. So we hope that the bankruptcy process goes smoothly."

GM spent $1.05 billion in the first half of 2008 in U.S. measured media, according to TNS Media Intelligence. Included in that figure is the combined $239.6 million GM spent on four brands -- Pontiac, Saturn, Hummer and Saab -- the automaker is selling or eliminating under Chapter 11 bankruptcy proceedings.

Even with the spending cut, Mr. LaNeve said June marked GM's best retail month of the year (excluding fleet sales), with 144,000 units and 10% higher than May, its prior best retail month of 2009. Moreover, its share rose slightly: market share was between 20.2% and 20.3% in June, the third straight month of share has inched over 20%.

Big jump at Ford
The greatest market-share leap, however, came at Ford, which declined federal funding. Mr. Pipas estimated Ford Motor's market share in June hit 16%, three points higher than a year ago. Ford, Lincoln and Mercury sales totaled 148,153, down 11 % from June 2008, but Ford reported the smallest drop among the six major carmakers.

Ford, moreover, outsold Toyota Motor Sales USA in June. Toyota reported July 1 that it sold 131,654 Toyota, Scion and Lexus models, marking a drop of 34.6% from a year ago. GM's total unit sales, including fleet, came to 176,571, down 33% from June 2008. American Honda Motor Co. saw its combined Honda and Acura sales slide 32% to 100,420 in June compared with the year-ago period. Chrysler Group reported the biggest falloff, selling 68,297 new vehicles in June, or 42% fewer than a year ago. Nissan North America said it sold 58,298 Nissan and Infiniti models, 23% fewer than June 2008.

Ford's Jim Farley, group VP-marketing and communications, dubbed the second quarter the "breakthrough" period for the carmaker, since the Ford brand has seen a "significant improvement" of 17% in perception of the Ford brand since January, shopping is up 16%, and intentions to purchase a Fusion hybrid are up 60%.

He said the average price for Ford's new Fusion midsize sedan is $1,800 higher than the price of the previous model. Ford moved 18,561 Fusions in June, a 26% jump from June 2008.

Rival Toyota's best-selling Camry saw its monthly sales drop 39% to 19,935 units vs. June 2008. Bob Carter, group VP-general manager of Toyota Division, said the brand has only a 45-day supply of its car models (with the exception of Prius), although the automaker plans to beef up production by 65,000 units in the second half, and that will help boost the Camry supply.

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