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Mixed June for autos
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July 3, 2001: 4:10 p.m. ET
Ford, GM sales lower, Chrysler slightly higher; Ford Explorer sets June record
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NEW YORK (CNNfn) - General Motors and Ford Motor Co. reported lower June sales Tuesday while Chrysler reported a slight increase, as the slowing economy continued to put a crimp into consumer spending.
However, June sales results were not quite as bad as some had feared, as sales of some vehicles, particularly sport/utility vehicles and light trucks, posted double-digit gains, suggesting the economy may finally be stabilizing and prompting automakers to forecast a slightly rosier second half.
That view was bolstered Tuesday by a government report that showed factory orders increased 2.5 percent in May, compared with a 3.4 percent decline the month before. The Commerce Department said orders for transportation goods contributed to the increase.
Automakers also are optimistic about a tax rebate of up to $600 coming to consumers this fall along with the effect of the Fed's six interest rate cuts this year.
Explorer sales set record
Ford (F: down $0.04 to $25.05, Research, Estimates) , the No. 2 automaker, said sales of its redesigned 2002 Explorer sport/utility vehicles set a June sales record with a 2.5 percent increase to 42,833 from 41,800 a year earlier,
Ford's total vehicle sales in the United States fell 6.6 percent to 392,412 from 419,932 a year ago.
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Ford said the 2002 Explorer set June sales record (Source: Wieck Photo) | |
Meanwhile, Chrysler Group, the U.S. unit of Germany's DaimlerChrysler (DCX: Research, Estimates), said sales of minivans drove a 1 percent increase in June sales to 218,633 from 215,597 a year earlier. Car sales rose 12 percent to 59,714, while truck sales fell 2 percent to 158,919.
Chrysler minivan sales jumped 22 percent and the popular PT Cruiser saw a 32 percent sales increase for the month.
And General Motors (GM: up $0.17 to $64.72, Research, Estimates) reported a 3 percent decline in June sales from a year ago, though truck sales jumped 9 percent.
The world's largest automaker said car sales dropped 13.5 percent to 218,581 units, while total truck sales rose 8.6 percent to 238,274. The figures include heavy trucks along with some truck sales by Japanese partner Isuzu Motors Ltd., and GM's Swedish auto unit Saab.
While GM was optimistic about positive economic signs, spokesman Paul Ballew told analysts during a conference call Tuesday that it anticipates 2001 sales of about 16.5 million units and that he expects the economy to slowly rebound.
"Monetary policy can take a year, year and a half to rifle through the economy," Ballew said. "Vehicle sales have held up somewhat better than what people have anticipated. You try to find balance ... When all is said and done, we don't anticipate the back end of this year to be a poor back end. We just continue to try to put forth what we think is the right balance. We're cautiously optimistic."
Ford bullish on outlook
Ford posted gains in Explorer sales despite questions about its safety stemming from the Firestone tire recall.
"We appreciate the trust that our customers place in our products and our company," Ford CEO Jacques Nasser said. "Also, we want to thank our dealers for their unwavering commitment to serving our customers."
The company also said it expects the economy to improve in the second half of 2001, and raised its sales projections for the year to 17 million units from the 16.5 million it forecast in May.
"We feel pretty optimistic about the second half of the year and where the economy is heading," George Pipas, Ford's U.S. sales analysis manager, said in a conference call with analysts Tuesday. "And this June sales report kicks off a good summer for Ford in several key areas."
The company acknowledged that sales were in part driven by big incentives and rebates, which while driving sales, will likely dampen profitability.
The Explorer, the best-selling SUV in the United States, has come under scrutiny by the National Highway Traffic Safety Administration following the recall last August of 6.5 million Firestone ATX and Wilderness AT tires, most of which came as standard equipment on Explorers.
The tires, which failed at high speeds, are blamed for numerous rollover accidents resulting in more than 100 deaths and several hundred injuries. Firestone has blamed Ford of using a faulty design for the Explorer, which it said made the vehicle prone to rolling over.
Consumers also have become more wary of Ford since May 22, when it announced the recall of an additional 13 million Wilderness AT tires at a cost of $3 billion.
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During the first five months of 2000, Explorer sales of 154,434 were nearly twice those of the No. 2 SUV, Chevrolet's Tahoe, with 79,382, and represented 13.9 percent of total SUV sales. But so far this year, Explorer sales account for only 10.1 percent of the total SUV market.
Ford also reported a 28.8 percent decrease in Lincoln sales while Volvo sales jumped 14.4 percent in June. Jaguar sales slipped 9.4 percent. 
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