DaimlerChrysler AG, the third-largest U.S. automaker, said U.S. sales of cars and trucks fell 34 percent to 171,940 July compared with near-record highs a year Ago.
The decline was from 260,937 a year earlier as Chrysler unit sales fell 37 percent and Mercedes-Benz rose 3.8 percent, the Stuttgart, Germany-based company said in a statement on PR Newswire today. Chrysler sales rose 27 percent in July 2005, the first month of an employee-discount program.
U.S. sales for General Motors Corp., the world's largest automaker, and Ford Motor Co. also probably fell about 20 percent in July, contributing to the fourth straight drop among the three U.S. automakers, according to the average estimate of analysts and economists surveyed by Bloomberg. Asian automakers including Toyota Motor Corp. and Honda Motor Co. probably gained U.S. market share for a 12th consecutive month.
"The biggest driver in the decline this year is the historically high comparison to last year," said Rebecca Lindland, an analyst with Global Insight Inc. in Lexington, Massachusetts. "Sales are decent, but they're not like crazy."
A decline in light truck sales hurts Ford, GM and Chrysler disproportionately because they rely more on those models for sales and they are among the automakers' most profitable. Through June, trucks accounted for 60 percent of GM's unit sales, 61 percent of Ford's and 70 percent of Chrysler's, according to Autodata Corp., a research firm in Woodcliff Lake, New Jersey.
The Japanese automakers are less dependent on trucks than their U.S. counterparts. Trucks accounted for 43 percent of Toyota's sales in the first half, 42 percent of Honda's and 47 percent of Nissan Motor Co.'s.
Decline
Total sales of cars and light trucks probably will drop to an annual rate of 17.2 million from 20.7 million in July 2005.
U.S. automakers' summer sales will be at least 10 percent below year-earlier totals, analysts say. Sales of light trucks—sport-utility vehicles, pickups and minivans—are falling at all three U.S. automakers, hurt by gasoline prices that averaged $3 a gallon last week, 31 percent more than a year ago.
"Almost regardless of the incentives that are being offered, they're having a really tough time making money selling vehicles," Lindland said.
Overall U.S. sales through June fell 2.4 percent, with car sales up 2.5 percent and truck sales down 6.3 percent.
GM sales chief Mark LaNeve said in an interview last week that the Detroit-based automaker's July sales were keeping pace with June, GM's best month so far this year even though sales were down 26 percent from June 2005. Sales of the Ford Fusion, Mercury Milan and Lincoln Zephyr mid-size sedans were "strong," Ford's Pipas said.
Big 3 Setbacks
GM's sales declined 12 percent in the first six months of 2006, while Dearborn, Michigan-based Ford's sales were down 4.1 percent and Auburn Hills, Michigan-based Chrysler's were 4.9 percent lower.
In July 2005, Ford had its first monthly market share gain in more than two years when its offer of employee discounts sparked a 29 percent increase in sales.
Toyota sales climbed 9.8 percent in the first half, boosting the company's U.S. market share 1.6 points to 14.6 percent, while Honda's sales rose 7.1 percent. Nissan's fell 5.7 percent.
Another worrisome factor: Confidence among consumers fell in July, according to a survey by the University of Michigan released last week. Its sentiment index slid to 84.7 in July from 84.9 in June.
Chrysler was the only U.S. automaker to bring back employee pricing in July. It also added rebates and interest-rate promotions. The automaker said today it will continue the program for another month.
GM offered employee pricing, which allows customers to pay the same price as workers, beginning in June 2005. The offer was matched by Ford and Chrysler and lasted through September.
August and September sales will be better than July's, but only because discounts will increase, said Paul Taylor, chief economist with the National Automobile Dealers Association.
--With reporting by Greg Bensinger and Ken Prewitt in New York.
To contact the reporters on this story: Jeff Green in Southfield, Michigan, at (1) (248) 827-2945 or jgreen16bloomberg.net; Barbara Powell in Southfield, Michigan, at (1) (248) 827-2959 or bpowell4bloomberg.net
To contact the editor responsible for this story: Dave Versical at (1) (248) 827-2944 or dversicalbloomberg.net