Auto sales at Ford (F) and Toyota (TM) cratered in July, with Ford reporting a 15% year-over-year drop and Toyota posting a 12% slump year-over-year.
More specifically, consumers continued to shun trucks and SUVs as gas prices climbed ever higher. Ford said that its truck and van sales fell 18%, while sales of SUVs and its flagship F-series trucks plummeted a whopping 54% and 21% respectively. Losses weren’t confined only to heavy vehicles. Toyota’s luxury brand Lexus, for example, recorded an 18% slide. WSJ:
The gas crunch set off a dramatic shift among U.S. car buyers. Trucks that used to be strong sellers suddenly piled up in dealer inventories and consumers started flocking to small cars. Those had traditionally appealed to a smaller segment of the market dominated by Toyota and Honda Motor Co., which had already battered the U.S. makers with their lower cost structures, higher margins and rising sales.
GM, Ford and Chrysler have been trying for more than two years to back away from heavy sales incentives, which eat into profit margins and tarnish brands in the eyes of some consumers. But a worsening of the slump in car and light-truck sales is forcing the Detroit companies to go all out to halt sales declines. Dealers are also sweetening already hefty incentives in an effort to lure buyers.
Perhaps more worrying is the fact that executives and analyst expect the climate to worsen. Ford marketing executive Jim Farley says that executives at Ford “expect the second half of 2008 will be more challenging than the first half as economic and credit conditions weaken.”
GM and Chrysler are expected to release their sales data later today.
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