June auto sales plunged, according to reports from two major automakers that showed Americans shunning pickups and SUVs in the face of record gas prices, but not yet buying the more fuel efficient cars as an alternative.
Some of the weak car sales could be due to growing consumer worries about their jobs and the economy. But automakers also suggested it could be due to the short supply of many fuel-efficient models after a rush to buy those vehicles in May.
Toyota Motor (TM) reported a 21% drop in U.S. sales in June from a year ago, far worse than the forecast from Edmunds.com of only a 12% drop in sales. It was the biggest year-over-year decline in U.S. sales in 10 years for Toyota.
The Japanese automaker, which is No. 2 in U.S. vehicle sales, saw a 15.6% jump in sales of its compact Corolla. But sales of its fuel efficient subcompact Yaris, as well as of the Camry, Toyota's best selling U.S. model going into this month, declined slightly. The Prius, the nation's best-selling hybrid offering, saw its sales fall by a third, due to tight supplies.
Ford Motor (F, Fortune 500), the No. 3 automaker in terms of U.S. sales, posted a 28% decline in sales — steeper than Edmunds.com's forecasts of a 25% drop. Ford saw demand for its SUVs plunge by more than half and for pickups and other trucks fall more than a third.
Even the so-called crossovers, a sign of strength in the light truck segment until recently, saw sales off 18% from a year earlier, as buyers went searching for more fuel efficient vehicles in the face of record $4 gas prices. But Ford apparently didn't have the car models buyers were looking for, as its car sales fell 12%.
George Pipas, the director of sales analysis for Ford, attributed part of the weak car sales to tight supplies after the strong May demand.
“That limited supply we believed had an impact,” he said.
Ford has announced plans to cut back production of its light trucks, and an increase in production of cars. But it hasn't been able to respond to the sudden increase in demand for cars.
“Clearly, the rapid rise in gasoline prices, and the resulting shift toward fuel efficient vehicles, has been challenging,” said Jim Farley, Ford group vice president, in a statement.
“Consumer fundamentals and consumer confidence deteriorated as the first half unfolded. The economy enters the second half of the year with a notable absence of momentum and a high degree of uncertainty,” Farley continued.
Farley said buyers' new demand for cars provided Ford an opportunity. But only the Ford Fusion, the Mercury Milan and the Volvo V70 and C70 posted year-over-year gains in sales. And sales of those four models combined only increased by 3000 vehicles from a year ago.
By comparison, sales of Ford's key F-Series pickup tumbled by more than 26,000 vehicles in June. The F-Series was, up until last month, the nation's best-selling vehicle.
Last month Ford announced it would delay the roll-out of the new version of the F-Series.
Other automakers are due to report their June sales later Wednesday.
Edmunds is predicting a 25% drop in sales at General Motors (GM, Fortune 500) and a 31% plummet in sales at Chrysler LLC.
Honda Motor (HMC) is the only major automaker expected to show even a modest gain from a year ago.
Overall U.S. sales are expected to fall 12%, according to Edmunds. Other experts are also forecasting a grim month for the industry.
Chrysler Chairman and CEO Bob Nardelli revealed last week that a private forecast from J.D. Power & Associates called for a seasonally-adjusted annual sales rate of only 12.5 million vehicles in June.
That would be the lowest reading in this closely watched measure since April 1992. It is also nearly 2 million below the rate seen in April and May of this year.
