AUTO INDUSTRY Automakers experience sharp sales decline

GM and Ford both suffered double-digit sales losses.
STAFF/WIRE REPORTS
Sales of the Chevrolet Cavalier continue to lag as the model heads into its final months of production.
Sales of the Lordstown-built car fell 44 percent in June to about 19,200. Cavalier sales were off 26 percent in May.
For the year, Cavalier sales are off 19 percent at about 103,900.
General Motors' Lordstown complex will stop building the Cavalier in October as it launches a new model, the Chevrolet Cobalt.
GM also sold about 3,600 Pontiac Sunfires last month, which was a 29 percent decline. The Lordstown plant recently stopped making Sunfires. For the year, Sunfire sales are off 9 percent at about 18,500.
GM and Ford Motor Co. took the hardest hits as demand for new cars and trucks fell more sharply than expected in June, but most industry observers say an improving economy should spur business for the rest of the summer.
"There's no doubt higher gasoline prices over the last few months have temporarily affected retail spending," said Jim Press, executive vice president of Toyota Motor Corp.'s U.S. arm. "However, we're already seeing a rise in consumer confidence and a softening of fuel prices. The combination should result in an upswing in industry sales this summer."
GM and Ford, the nation's two largest automakers, both posted unexpectedly large double-digit sales declines last month and continued to lose business to foreign rivals.
Low results
GM officials said earlier this week that June results were shaping up to be below expectations, though its 15.6 percent drop from a year ago was larger than observers predicted. Car sales at the world's largest automaker were down 15 percent, while truck sales fell 16 percent.
Sales of Ford's domestic brands were off 11.5 percent in June as an aging car lineup hurt business. Sales of Ford, Lincoln and Mercury cars were off 20.5 percent last month, while truck sales were down nearly 7 percent.
But DaimlerChrysler AG's Chrysler Group, the No. 3 U.S. automaker, rode strong demand for its new Chrysler 300 flagship sedan to a 5.5 percent increase in car sales and a 1 percent overall gain.
Among foreign brands posting higher year-over-year results were Toyota Motor Sales USA, American Honda Motor Co., Nissan North America, Hyundai Motor America, Kia Motors America and BMW.
June's seasonally adjusted annual sales rate was 15.4 million units, compared with 16.5 million a year ago and 17.8 million in May. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.
Analysts predicted overall June results would be lower than a year ago and down significantly from May's torrid selling pace, but no one expected the pace to fall off as drastically as it did.
Still, industry executives remained fairly upbeat about prospects for the next few months. At least a couple said they don't expect slowly rising interest rates to have a big effect on business.
"Everyone's been talking about it for probably six months, and rates are still at historically low levels," said Jed Connelly, senior vice president for sales and marketing at Nissan's North American affiliate, where sales climbed 9 percent in June.