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Tuesday, July 01, 2008 5:58 PM


Auto Sales Dismal At GM, Toyota, Ford, Chrysler


Auto sales were generally dismal across the board, with Honda the only bright spot as reported in an Auto Makers Report by the Wall Street Journal.



The declines were exacerbated fewer selling days; there were 24 selling days last month, compared with 27 in June 2007.

Ford reported 173,462 light-vehicle sales for June, compared with 240,354 a year earlier.

Toyota sold 193,234 vehicles in June, compared with 245,739 a year earlier.

For the second quarter, GM produced 835,000 vehicles, down 307,000 vehicles or 27% from a year ago.Looking ahead, GM now expects third-quarter production of 900,000 vehicles, down from its prior view of 1.1 million, amid slashing trucks production by about 209,000.

Chrysler's sales slumped to 117,457 from 183,347, with car sales tumbling 49% to 29,858 and truck sales decreasing 30% to 87,599. President Jim Press said despite U.S. consumer confidence being at a 16-year low, "Chrysler is fighting back and making progress by continuing to invest in our products and aligning our volume with the market."
Chrysler Fighting To Avoid Bankruptcy

The idea that Chrysler is "fighting back" is preposterous. Even sillier is the claim of "aligning our volume with the market" smack in the midst of a 49% sales plunge. This company will not last long.

GM's Over-Promise Under-Deliver Optimism Continues

GM's ever optimistic, never reached forecast is for third quarter production to increase from 835,000 vehicles to 900,000 vehicles. That is a drop from their prior estimate of 1.1 million vehicles. However, the entire drop is based solely on slashing truck production by 209,000 trucks. Let's look for some clues to see if they can do it.

In June Auto Sales: General Motors Forbes is reporting "Adjusted to reflect three additional selling days in the year-ago period, GM's sales fell a more modest 8.3 percent."

Although 8.3% sounds a lot better than 18.5%, car sales were still down and are likely to get worse. If GM expects to hold to its car production forecast, it better be expecting some huge incentives as well or it will be flooding dealer lots with stuff they cannot sell.

U.S. Automakers Can't Justify June

Here's a funny comment by Ford in U.S. Automakers Can't Justify June: Ford vice president James D. Farley, conceded that "the economy enters the second half of the year with a notable absence of momentum and a high degree of uncertainty."

I disagree on both counts: There is plenty of momentum, all of it downhill. And as opposed to there being a "high degree of uncertainty" I have to ask: about what? There is a very high degree of certainty that economic conditions are going to get far worse than they are now.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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