US carmakers slump at home

The three Detroit-based carmakers suffered the humiliation last month of seeing their home market share sink below 50 per cent for the first time.

Toyota opened a clear lead over Ford Motor to become the second-biggest seller of vehicles in the US behind General Motors.

GM, Ford and DaimlerChrysler’s US division have been hammered by slowing consumer demand, fierce competition from their offshore rivals – notably Toyota – and a deliberate policy of cutting back low-margin sales to car-rental operators.

GM’s sales slumped 22 per cent in July from a year earlier. Ford and Chrysler posted declines of 19 per cent and 8 per cent respectively. Last month had one fewer selling day than July 2006.

Although both GM and Ford reported unexpectedly strong second-quarter earnings, the figures were buoyed by overseas operations and warned of difficult market conditions in North America.

“We will be confronting challenges as we go forward, both economic and competitive,” George Pipas, Ford’s sales analyst, said on Wednesday. “July may just be Exhibit A.” Mr Pipas recalled that when he joined Ford 30 years ago, the Detroit industry sold nine out of every 10 cars in the US.

According to preliminary figures, total light-vehicle sales fell to a seasonally adjusted, annual level of 15.4m units last month, from 17.2m a year earlier and 15.6m in June.

Ford indicated it would revise downwards its estimate of industry-wide sales this year.

Paul Ballew, GM’s sales analyst, warned the tough conditions were likely to persist into 2008.

Even Toyota and Honda reported sales declines of 7 per cent and 4 per cent respectively last month, while Nissan posted a slight increase.

Jim Lentz, executive vice-president at Toyota’s US subsidiary, said: “The industry stumbled this month on continued housing weakness.”

Japanese carmakers have boosted sales with record discounts and other sales incentives, according to, an online car-pricing service.

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