Automakers hit more bumps in the road in June as U.S. sales fell precipitously, and manufacturers failed to adapt to a shift in demand to more fuel-efficient cars, company reports showed July 1. Overall sales totaled 1.189 million vehicles or a seasonally adjusted annual rate of 13.64 million, down 13% year-to-year, according to market research firm Autodata. "The $4 [per gallon] gasoline, the recession in housing and a collapse in consumer confidence has kept people sitting on their hands," said David Healy, analyst at Burnham Securities. "It's the worst possible situation for the industry because not only are sales slow but you have a mix problem where the profitable vehicles like the SUVs are hard to give away and they can't build enough of the small fuel-efficient vehicles." In the current environment of soaring fuel prices and weak consumer confidence, Healy said, "it'll probably be 2010 before any of the Detroit companies will be profitable again." General Motors said its U.S. sales fell 18.5% in June to 265,937, holding off a challenge from Japanese Toyota in the domestic market. Adjusted for selling days, the decline was 8.3%, GM said. The automaker also cited "the limited availability of some of GM's most popular models," while demand for big trucks and SUVs floundered. "We're doing all we can to meet customer demand for our popular crossovers and cars, including increasing overtime or adding Saturday shifts," at key plants, said Mark LaNeve, vice president at GM North America. Toyota meanwhile saw a 21.4% drop in U.S. sales or 11.5% adjusted for the lower number of sales days in June. The Japanese manufacturer, which up to now had been seen as the best adapted to the current environment, was caught short on inventory of the hot-selling hybrid Prius, whose sales fell 25.5% from a year ago. Healy said even Toyota failed to anticipate the rapid shift in consumer demand and the surge in fuel prices. Robert Brusca at FAO Economics said automakers were hurt by the "wrong mix" of cars. "Changing the mix is very difficult," he said. "If you do it too hastily you run the risk of creating a bad car." Chrysler LLC showed the worst declines among the top automakers, reporting a 36% slide in U.S. sales from a year ago to 117,457. "The June results reflect the industrywide impact of US consumer confidence being at its lowest point since 1992," said Jim Press, president and vice chairman of the U.S. auto manufacturer. Chrysler, highly dependent on trucks and SUVs, extended its incentives to buyers to guarantee gasoline at a price of $2.99 a gallon, below the current market price. Ford Motor Co. said its U.S. sales tumbled 28.1% to 167,090 units, with sport utility vehicle sales skidding over 50%. Japan's Honda was among the few automakers to show a gain, as sales rose 1.1%. "Staying true to our core values is allowing Honda to weather the storm of rising gas prices and help consumers find shelter in our products," said Dick Colliver, executive vice president of American Honda. "Our factories are doing everything they can to produce the fuel-efficient models consumers are desperately in need of." Copyright 2008 Agence France-Presse
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