Big Three Automakers Lose Ground to Japanese in June

General Motors, Ford and DaimlerChrysler's Chrysler Group all posted sales drops in June as Toyota, Honda and Nissan continued to put pressure on the U.S. auto giants. General Motors did especially poorly, recording a 21.3% decline in light vehicle sales from last year on retail weakness and slow sales to rental car companies. Analysts were expecting an 8% drop. "Our retail performance for the month was also below the solid running rate we've experienced for the first half of the year, which we attribute to a soft industry and lower incentive spending than our competitors," said Mark LaNeve, GM's head of sales and marketing. GM shares fell up to 4.8% in AH trading Tuesday after the report. Sales at Ford and the Chrysler Group fell less steeply, by 8.1% and 1.8%, respectively, with Ford's decline attributable entirely to low rental fleet sales and Chrysler pinched by competition for its trucks and SUVs as well as high gasoline prices. (Chrysler is in the midst of being sold to Cerberus Capital Management.) Japanese auto manufacturers all posted double-digit sales increases, reflecting consumer interest in their fuel-efficient models and incentive programs. According to Autodata Corp., they increased their share of U.S. light-vehicle sales in June to 32.9% from 28.3% a year ago. The combined market share of the Big Three fell to 50.2% from 56.1% a year ago.

Sources: Wall Street Journal I, II, MarketWatch
Commentary: June U.S. Light Vehicle Sales Preview • General Motors: This Stock is Out of Gas • Are Domestic Auto Manufacturers Losing Consumer Interest?
Stocks/ETFs to watch: General Motors Corp. (GM), Ford Motor Company (F), DaimlerChrysler AG (DCX), Toyota Motor Corp. (TM), Nissan Motor Co., Ltd. [ADR] (NSANY), Honda Motor Co., Ltd. [ADR] (HMC). ETFs: PowerShares FTSE RAFI Consumer Goods (PRFG), WisdomTree International Cons Cyclical (DPC), BLDRS Asia 50 ADR Index (ADRA)
Conference call transcripts: General Motors Q1 2007, DaimlerChrysler Q1 2007, Ford Motor Q1 2007

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