GM and Ford lose ground to Japanese
General Motors and Ford lost ground to Japanese automakers this past month as their rivals made a strong comeback from last year's earthquake. However, Chrysler turned in a double digit sales for July. These vehicles are on a lot in Springfield, Ill. (July 1, 2012) Credit: AP
The Associated Press
DETROIT -- General Motors and Ford lost ground to Japanese automakers last month as their rivals made a strong comeback from last year's earthquake.
GM's July sales fell 6 percent from a year earlier, while Ford's slipped 4 percent. By contrast, Honda sales leaped 45 percent while Toyota posted a 26 percent gain. Chrysler also did well, notching its best July in five years.
Total U.S. auto sales are expected to rise 11 percent, boosted by summer clearance deals and low-cost financing. The Japanese are seeing the biggest sales gains from a year earlier, when they couldn't supply enough models to U.S. showrooms after production was hobbled by a March earthquake.
In the first half of 2012, sales of new cars and trucks ran at an annual pace of just over 14 million, the industry's best performance in five years. Buyers snapped up everything from small cars to pickups, making the industry a bright spot in the economy. The only setback came in May, when sales slowed to an annual pace of 13.8 million as the stock market fell.
In July, car shoppers had a lot of financial enticements, analysts say. There were good deals on last year's models, low- or no-interest financing and strong trade-in values due to high used-car prices. That helped buyers shrug off negatives such as stagnant hiring and the financial crisis in Europe.
Auto loans are available from banks for just over 3 percent, and car companies are offering zero-percent financing on many models.
The auto pricing website TrueCar.com estimates Volkswagen's incentive spending was up 38 percent last month. Volkswagen was offering zero-percent financing for five years on all non-diesel 2012 models.
Nissan's spending was also up 22 percent to $3,205, the highest level among the eight largest automakers. Nissan was offering up to $3,400 off the outgoing Altima sedan as the new version hits the market.
At Ford, the Lincoln luxury brand and Fiesta subcompact sapped sales in July. Lincoln sales dropped 11 percent, while the Fiesta was off 23 percent. Sales of the Escape small SUV fell 12 percent after the latest version was recalled for safety problems.
