GM Sales Go Down

General Motors had its lowest sales in June in nine years. The decrease comprises 24 percent comparing with last year of the same month.

According to an estimate by the Autodata Corporation, a firm that tracks industry statistics the sales dropped to a market share of 22.1 percent.

The same situation is at Ford Motor and Chrysler, which sales also decreased, as Japanese automakers successfully conquer the auto markets.

Toyota’s sale went up by 6 percent, and it took the second place among biggest American car makers. Toyota’s market share equals to 16.9 percent, which is larger than that of Ford’s American brands.

Ford said its decline was because of its voluntary cuts in less-profitable sales to rental car companies. It said newer models, like the Ford Edge, a crossover vehicle, helped its sales at dealerships equal those in June last year.

“There are all the indications that we’re going to see an incentives war this summer,” said Jesse Toprak, director of industry analysis at Edmunds.com, a Web site that gives car-buying advice to consumers.

Paul Ballew, G.M.’s chief sales analyst, said that its sales in June fell short of the company’s expectations. But he also mentioned that total sales for the first half of the year did meet the goals G.M. set in its turnaround plan.

He added that G.M., which introduced no-interest financing plans after the September 11 to help give a boost to the American economy, now is thinking about ways tod respond to bigger discounts being offered by its rivals, chiefly Toyota.

Toyota executives mentioned that company sales were high in Texas, which is the segment market for Detroit’s pickups and the home of the Tundra factory in San Antonio. However, sales of the Chevrolet Silverado have decreased by 24 percent.

“In June we just had competitors flailing away,” Mr. Ballew said. “We don’t think we have to match dollar for dollar, but we’re not going to allow a competitor to try to steal sales away just because they want to subsidize their product.”

Toyota officials also said that the company, on average, paid less in incentives than
Detroit carmakers. They said word of mouth had helped spur sales of the pickup, and the pickup truck market had the largest discounts in auto market.

Detroit company was planning to change its discount policy, because it has a bad effect on the brand image and decreases its profit margins.

According to Edmunds.com Toyota and Honda, which do not usually use such methods, have increased their discounts greatly in June.

James Lentz, executive vice president of Toyota Motor Sales, said that the discount do not reflect the company overall strategy. He said that such deals could help to conquer new market share helping new shoppers who might otherwise not be able to afford a new vehicle because the value of their trade-in was less than the amount remaining on their loan.

“The customer expects and sometimes needs incentives to help them out of a negative-equity situation,” Mr. Lentz said. “Our incentive actions are really being driven by the segment. We still will use incentives tactically only when necessary.”

“We didn’t anticipate that Toyota would go 0-for-60 on a brand new truck and that has thrown a bit of a curveball,” Mr. Ballew said. “They certainly have behaved in a way beyond anything I can rationalize.”

General Motors had many problems during this month, such as Toyota’s Tundra, fall of its midsize sport utility vehicles by 53 percent, and its small-car sales by 36 percent during the past year.- Alla Harutyunyan for HULIQ.COM