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GM's July Sales Rise 8% as Ford Misses Estimates

Tuesday, 02 Aug 2011 01:05 PM

Ford Motor Co. (F) said U.S. sales rose less than analysts’ estimates in July and General Motors Co. (GM) predicted industrywide deliveries may be little changed from a year earlier as consumers reduce spending.

Ford light-vehicle sales rose 5.9 percent to 180,315 vehicles from 170,208 a year earlier, the Dearborn, Michigan- based automaker said today in a statement. GM deliveries climbed 7.6 percent to 214,915. The average estimate of six analysts surveyed by Bloomberg was for a 7.6 percent increase in Ford sales and 7 percent rise for GM.

Congressional debate over raising the $14.3 trillion U.S. debt ceiling combined with higher gasoline prices and limited supply of small vehicles is hindering total industry sales, Don Johnson, GM’s vice president of U.S. sales said on a conference call. July light-vehicle deliveries may have run at a seasonally adjusted annual rate of 12 million to 12.1 million, with “flat” industrywide sales, he said.

“The economy has clearly lost some momentum,” Johnson said today on a conference call. “We do believe that it will continue to recover, but more gradually than we originally anticipated as we move through the second half of the year.”

Consumer spending in the U.S. unexpectedly dropped in June for the first time in almost two years, Commerce Department figures showed today in Washington. Incomes grew at the slowest pace since November and the savings rate climbed to the highest since September.

2011 Forecasts

GM and Ford in the past week have said that 2011 U.S. vehicle sales may be at the low end of their forecast of 13 million to 13.5 million vehicles, including medium- and heavy- duty trucks.

Chrysler Group LLC, the automaker majority owned by Fiat SpA (F), said deliveries increased 20 percent to 112,026, beating the 15 percent gain that was the average of four analysts’ estimates. Sales of Chrysler’s Jeep Grand Cherokee and Wrangler sport-utility vehicles surged 76 percent and 43 percent, respectively, the Auburn Hills, Michigan-based company said.

Deliveries of GM’s Chevrolet Cruze compact slipped 1 percent to 24,648 from June, when it was the industry’s best- selling car. GM ended July with about 28,000 Cruzes in inventory, or about 30 days supply, Johnson said yesterday.

Sales of Ford’s F-Series and GM’s Chevrolet Silverado pickups, the two top-selling models in the industry, declined in July. Silverado deliveries dropped 4.5 percent to 33,121, while F-Series slipped 2.7 percent to 49,104.

The Ford 5.9 percent increase reflects year-ago sales of Volvo models. Ford has since sold the brand.

Truck Inventory

Inventory of Silverado and GMC Sierra full-size trucks fell to 115 days supply from 122 days at the end of June, Johnson said today. The automaker is targeting 200,000 pickups, or 90 days supply, by the end of the year, he said.

GM may have to cut prices or production on trucks if demand falls further, said Itay Michaeli, a Citigroup Inc. analyst based in New York.

For now, “they seem to have dealer buy-in,” Michaeli said in a phone interview. “If that changes, they will have to cut production.”

GM’s forecast for the July sales rate exceeds the 11.8 million pace that was the average estimate of 12 analysts surveyed by Bloomberg. Total sales for the industry may fall about 2 percent from July 2010, Johnson said yesterday.

Analysts are projecting a sales rate for July below the 12.1 million averaged in the second quarter and 12.5 million in the first half. The pace has slowed after the March 11 earthquake and tsunami in Japan disrupted production and led to shortages of parts and finished vehicles.

Toyota Sales

Toyota Motor Corp. (7203), which has said it expects sales to drop from a year earlier through at least this month, may report a 25 percent decline in deliveries for July, the average estimate of three analysts surveyed by Bloomberg.

Sales may decline 23 percent at Honda Motor Co., and Nissan Motor Co. deliveries may be little changed from a year earlier, according to the average estimate of three analysts surveyed by Bloomberg.

Employers added 18,000 jobs in June, the smallest gain in nine months, as the U.S. unemployment rate rose to 9.2 percent, the Labor Department said. The Thomson Reuters/University of Michigan index of consumer sentiment fell in July to 63.7, the weakest since March 2009, three months before the recession ended.

GM fell 50 cents, or 1.8 percent, to $27.57 at 12:43 p.m. in New York Stock Exchange composite trading. Ford declined 31 cents, or 2.5 percent, to $12.04.

July Rate

Analysts said estimating the July sales rate was more difficult than other months because the Bureau of Economic Analysis was set to publish today its seasonal adjustments that apply from July through the next 12 months. The revised adjustments are based on sales during the past three years, Everette Johnson, a BEA economist in Washington, said last week.

July had 26 selling days, one fewer than a year earlier.

The U.S. averaged annual light-vehicle sales of 16.8 million vehicles from 2000 to 2007, according to researcher Autodata Corp. Deliveries climbed to 11.6 million in 2010 from a 27-year low of 10.4 million in 2009.

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Ford Motor Co. (F)said U.S. sales rose less than analysts estimates in July and General Motors Co. (GM) predicted industrywide deliveries may be little changed from a year earlier as consumers reduce spending. Ford light-vehicle sales rose 5.9 percent to 180,315 vehicles...
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2011-05-02
Tuesday, 02 Aug 2011 01:05 PM
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