Automakers Lower 2007 Forecasts; Toyota Delays New Hybrid

General Motors, Ford and Toyota each lowered their industry sales forecasts for the full-year, but Toyota's Q2 projections improved,after industry-wide sales fell 3.2% year-to-date through July. Toyota expects a 2% full-year decline to 16.3 million autos from 16.6M autos sold in 2006, with a rebound beginning next year and steady growth into the next decade. GM lowered its target to 16.5-16.6M from its forecast earlier this month for 16.6-16.7M. GM's head of sales commented, "The consumer's hurting. If we're in a soft [auto] market, we're going to have to lower price[s]." Ford lowered its outlook to 16.5-16.8M, from its prior forecast of 16.8M. Separately, The Wall Street Journal reports sources say Toyota is delaying the release of its new hybrid model autos until early 2009 (originally scheduled to hit the market in late 2008). Lithium-ion batteries will not be used due to safety concerns, and are now not expected to be released until 2011. Toyota's target of selling 600,000 hybrids annually in the U.S. by early next decade is on hold, according to sources. Approximately 200,000 were sold in 2006.

Sources: Bloomberg, New York Times, Wall Street Journal I, II
Commentary: July Auto Sales Hit Nine-Year Low • July 2007 Light Vehicle Sales: Is the Point of Rationalization Upon Us? • Toyota Posts Double-Digit Profit, Sales Growth, Reiterates FY Guidance
Stocks/ETFs to watch: TM, GM, F, DCX, HMC, NSANY

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