Toyota Soars, Passes Ford to Rank No. 2 in U.S. Sales
Aug. 1 (Bloomberg) -- Toyota Motor Corp. passed Ford Motor Co. in July to become the No. 2 auto retailer in the U.S. for the first time, after each of the domestic car companies posted sales declines above 20 percent.
Toyota sold 241,826 vehicles in the month, a 12 percent increase, leading Asian automakers to a record share of the U.S. market. Ford dropped 34 percent to 241,399. Sales of General Motors Corp., the world's No. 1 automaker, fell 23 percent.
``The results finally reflect the reality that Toyota is a superlative auto manufacturer and Ford is struggling,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee.
Toyota's ascendancy comes as GM and Ford are cutting a combined 60,000 U.S. union jobs and closing 26 locations to end North American losses. DaimlerChrysler's Chrysler unit last month revived employee discounts for all buyers in an effort to end four straight months of U.S. sales declines.
Toyota also gained on Detroit-based GM as the world's largest automaker in the first half of this year by cutting GM's lead in half, to 240,000 vehicles. The Toyota City-based automaker passed Ford, whose founder invented the modern assembly line to put America on wheels almost a century ago, to become No. 2 in global sales in 2003.
In April, Toyota overtook DaimlerChrysler AG to rank No. 3 in U.S. sales and leads the German automaker after seven months.
Not Intentional
``It's not Toyota's intention to overtake any particular manufacturer,'' Toyota North American Senior Vice President Dennis Cuneo said in an interview.
Honda, the No. 2 Japanese automaker in the U.S. behind Toyota, gained 6 percent in July. Honda's sales including the Acura brand also surpassed the sales of DaimlerChrysler's Chrysler, Jeep and Dodge brands for the first time in July. Nissan Motor Co. dropped 20 percent, for its ninth decline in 10 months.
Asian automakers captured a record 41.4 percent of the U.S. market as the U.S.-based companies hit a record-low 52 percent, according to data compiled by Bloomberg. The annualized sales rate fell to 17.2 million cars and trucks from 20.7 million for July 2005. Total U.S. auto sales fell 17.4 percent to 1.49 million.
``The U.S. market is really becoming the Big Six, rather than the Big Three,'' Cuneo said. ``The fates of the individual companies are going to move around. It wasn't that long ago, back in the 90s, that analysts were taking Toyota to task for not having enough SUVs.''
Pickup Peril
Ford, of Dearborn, Michigan, and GM have been affected by sales slides in July for pickup trucks, including the top-selling model for each company. GM's Chevrolet Silverado pickup had a 31 percent slide, while Ford's F-Series declined 46 percent.
Both trucks were hurt by comparisons to a year earlier when the companies were offering employee prices to all buyers. For the first seven months, the Silverado had a 20 percent decline compared with the same period in 2005. The F-Series is down by 12 percent.
In July 2005, with the employee-pricing offers, Ford sold 126,905 F-Series pickups, the most for a vehicle in any month since the company's Model T in the 1920s.
Toyota and Honda have benefited in July from models with better fuel mileage as gasoline remained above $3 a gallon through much of the U.S.
Fuel Favorites
Honda's redesigned Civic posted a 2.1 percent gain in July and its Accord had a 5.3 percent increase. Sales of Toyota's Corolla rose 37 percent, and its Prius gasoline-electric hybrid was up 15 percent.
``The fuel issue is having some larger effect on sales,'' said David Hilton, senior manager in the Americas automotive consulting practice of Capgemini SA.
Average U.S. gasoline prices finished July at $3.01 a gallon, marking a 32 percent increase in the past 12 months, according to AAA data.
GM's light vehicle sales, excluding medium-duty trucks, fell 22 percent to 406,298. Light truck sales declined 31 percent, and passenger car sales dropped 4.2 percent. Sales of the Chevrolet TrailBlazer, GM's best-selling sport-utility vehicle, plunged 52 percent.
It was the second straight month that GM's U.S. market share exceeded 27 percent. The average is 24.5 percent for the first seven months of the year. GM opted not to repeat offers of employee discounts that led to increased sales in June and July 2005. Instead, it's reducing car and truck prices overall.
Ford's sales dropped to 241,339 for the month, including a 44 percent decline in trucks. Ford's mid-size and large sport- utility vehicles also continued their slide. Sales of the Explorer fell 51 percent and the Expedition 57 was down percent.
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.
``What goes around, comes around,'' Ford sales analyst George Pipas said.
DaimlerChrysler sales fell 34 percent to 171,940, Sales of the Chrysler, Jeep and Dodge brands dropped to 150,349 from 240,146 a year earlier. Mercedes car and truck sales rose 3.8 percent to 21,591.
Chrysler, of Auburn Hills, Michigan, 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.
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.
Some automakers adjust percent changes in vehicle sales on a ``sales day'' basis and assume no sales occur on Sundays. Bloomberg News and some other automakers report unadjusted percentage changes. There were 25 selling days last month, one less than in July 2005. Unadjusted sales comparisons are about 4 percentage points lower than the adjusted.
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