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Toyota, Honda Report Sales Jump in July

Posted on: Tuesday, 1 August 2006, 18:00 CDT

By SARAH KARUSH

DETROIT - Amid steep gas prices, Toyota Motor Corp. rode its reputation for fuel-efficient cars to a double-digit sales increase in July and outsold Ford in the U.S. for the first month ever. Honda Motor Co. also reported robust sales.

U.S. automakers experienced a moribund July as sales plummeted from a year ago, when heavy discounts spurred a near record month for the auto industry.

For General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, the steepest declines were in trucks and sport utility vehicles, the high-margin items on which the three companies are heavily dependent. Both Honda and Toyota credited their reputations for fuel efficiency and strength in small cars for boosting them during a period when retail gasoline prices have been near $3 per gallon in most parts of the country.

Overall, 1.49 million vehicles were sold last month, a 17.4 percent decrease from July 2005. The seasonally adjusted sales rate, which shows what total sales would be if they remained at the same rate for the entire year, was 17.24 million, according to Autodata Corp. Automakers sold 17 million vehicles in 2005.

GM, the world's largest automaker, said its sales fell 22.2 percent, with trucks falling 31.2 percent and cars inching down 2.7 percent.

At Ford, sales of Ford, Lincoln and Mercury vehicles fell 35.2 percent. Truck sales tumbled 44.8 percent, while cars slipped 6.7 percent. Sales of F-Series pickup trucks, long the country's best-selling vehicle and the company's most important vehicle, shot down 45.6 percent.

DaimlerChrysler's Chrysler Group said its sales fell 37.4 percent, with truck sales off 40 percent and car sales off 23.5 percent. That change happened even though Chrysler, alone among automakers, has revived the employee price promotion that fueled sales last year.

Chrysler announced Tuesday that it would extend the discount program through August. Company officials said the promotion was helping, though not as much as last year, when all three domestic automakers were doing it and each benefited from the advertising of the others.

Toyota's sales, meanwhile, soared 11.7 percent, with cars jumping 19.8 percent and trucks up 1.3 percent. The company outsold Ford by more than 17,000 vehicles.

David Lucas, vice president of Autodata, said it was the first time Toyota had sold more vehicles than Ford.

"Market conditions are playing to traditional Toyota strengths of fuel efficiency, strong passenger car offerings as well as our comprehensive hybrid lineup," Jim Lentz, executive vice president of Toyota's U.S. division, said in a statement.

Honda said its July sales rose 6 percent, with cars up 5.4 percent and trucks up 6.8 percent. The company said it was unable to keep up with demand for its small cars.

Paul Ballew, GM's executive director of global market and industry analysis, said GM's year-over-year decline was in line with expectations after "inflated" sales in the summer of 2005.

Ford said it was heartened by growing retail demand for its new mid-size sedans, the Ford Fusion, Mercury Milan and Lincoln Zephyr. Retail sales for the vehicles were up 18 percent over June, the company said.

But Ford's lineup of new vehicles is thin this year compared to its competitors. In the fall, it is scheduled to introduce two crossovers, the Ford Edge and the Lincoln MKX. The company hopes the more fuel-efficient SUV alternatives will help it hold on to market share as high gas prices cause consumer tastes to shift.

Nissan Motor Co. said it sold 19.5 percent fewer vehicles. That included a 24.9 percent decrease in trucks and a 14.5 percent decrease in cars. Paul Taylor, chief economist of the National Automobile Dealers Association, attributed Nissan's lagging sales to a lack of fresh products.

For the first seven months of the year, Ford's sales fell 9.7 percent, GM's sales were down 14.1 percent, and Chrysler's sales fell 10.4 percent. Toyota's and Honda's sales rose 10.1 percent and 6.9 percent, respectively, while Nissan's fell 7.9 percent.

GM shares fell 93 cents, or nearly 3 percent, to close at $31.30 on the New York Stock Exchange. Ford shares fell 9 cents to $6.58, while DaimlerChrysler's U.S. shares fell 61 cents to $51.04.

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On the Net:

DaimlerChrysler AG: http://www.daimlerchrysler.com

Ford Motor Co.: http://www.ford.com

General Motors Corp.: http://www.gm.com

Honda Motor Co.: http://www.honda.com

Nissan Motor Co.: http://www.nissanusa.com

Toyota Motor Corp.: http://www.toyota.com

Source: Associated Press/AP Online

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