FORD GAINS MARKET SHARE

+ Click to Enlarge OPEN TO NEGOTIATION: Ford has increased its share of the US domestic market from 14.6 percent in June 2008 to 18 percent in June 2009, largely thanks to signs like this. Image: AFP

July 3, 2009

By David Bailey

US auto sales tumbled 28 percent in June, the narrowest decline in nine months, as Ford stole market share from its rivals.

Automakers said the results pointed to more stability for the economy but fell short of marking a turnaround for the US auto market after a punishing four-year decline.

Ford, the only US automaker not supported by emergency government funding, reported a 10.9 percent drop in domestic sales in June and took back the No.2 position in US sales from Toyota for the first half of 2009.

The sales results came as GM pleaded its case to the US bankruptcy court to permit a swift sale of its best assets to a new company funded by the Obama administration and avoid liquidation.

GM, the top-selling automaker in the US market, posted a 33.6 percent decline in domestic sales in June and sounded a more cautious tone about the economy than its rivals.

GM sales chief Mark LaNeve said: "Our results are tenuous. Our customers are expecting a very quick exit from bankruptcy similar to what they saw for Chrysler."

Chrysler, in its first sales report following its sale to a group led by Fiat in June, said US in June had fallen 42 percent.

Toyota posted a 31.9 percent sales decline in June and Honda said sales fell 29.5 percent from June 2008 while Nissan recorded a 23.1 percent drop and said there were some signs demand had stabilised after industry sales plunged following the financial market collapse in September 2008.

Al Castignetti, general manager for Nissan in the US, said: "I wouldn't say the industry has turned around but it has stabilised in the last 60 days."

Nissan is the No.6 automaker in US sales, but will fall to No.7 for the first half of 2009 if Hyundai and Kia sales are combined. Hyundai has made sharp gains over the past year in terms of sales and perception.

Some of the more bullish analysts and economists had expected industrywide US sales to top the 10 million-unit annual rate in June for the strongest showing this year.

However, the rate came in at 9.69 million units, down from 9.9 million in May, which underscores the uncertainty. At 10 million units it still would have been among the weakest months since the early 1980's.

Auto executives said credit was flowing better and traffic in showrooms increasing but worries over the economy had left consumers window-shopping instead of buying.

Results were dismal in California, the single largest market, and the Western region in general where auto executives predicted demand was unlikely to recover until later in 2009.

Ford, which saw its market share jump to 18 percent in June from 14.6 percent a year ago, said markets in the middle of the country were much stronger than on either coast. That was a factor that played to Ford's strength in the central states.

GM, Chrysler and Toyota posted sharp market-share declines for the month from a year ago.

Looking ahead, automakers expect a modest bump in US auto sales from the "cash for clunkers" programme signed into law in June which will begin to gear up later in July. - Reuters