Big 3's Auto Sales down 20% in June over last year

DETROIT — American car buyers became very discouraged in June. Beaten down by high gas prices and other contributors to growing household financial stress, they bought 18 percent fewer vehicles than a year earlier. As a result, General Motors' year-to-year sales plunged 19 percent; its biggest competitor, Toyota, posted a 20 percent loss and Ford Motor sales dropping a shocking 29 percent compared to a year earlier. Toyota's sales are down 7 percent for the year and Ford's are down 14 percent.

Analysts attributed at least some of the sales woes to supply constraints. Those who were in the market wanted more small cars than could be built by an industry still trying to catch up with consumers' desire to downsize. The Ford Focus was among the models that became supply-constrained in June.

June sales for the U.S. auto industry were 1.19 million units compared with 1.46 million vehicles during June 2007. The June results left the industry's first-half sales at just 7.41 million units, a dismal performance during what was one of the most disruptive periods in the history of American car manufacturing and sales.

The light-vehicle sales pace for the year now is running at an anemic seasonally adjusted 13.7 million units, auto executives estimated.

The June results left industry executives still searching for the bottom of a market that has fallen further and faster than anyone could have foreseen before gasoline prices skyrocketed to an average of $4 a gallon by the end of June from $3 a gallon at the beginning of 2008.

"The auto consumer is under a lot of pressure and stress, which is manifesting itself in uncertainty toward big purchases," said Jim Farley, Ford's executive vice president of marketing communications. "It's a difficult situation, and we think it's going to persist for many months to come and possibly longer."

Overall, U.S. consumers continued to flock to small cars. Sales of the Toyota Prius hybrid remain constrained as Toyota ramps up manufacturing. The company sold fewer than 12,000 Prius units in June, down about 25 percent on an adjusted basis from sales of nearly 18,000 units in June 2007.

Ford sold 33,000 units of its Focus subcompact in May but only 18,000 in June. Company executives said that inventory levels of only about a 20-day supply of Focuses, in Ford and dealer stocks, meant that many consumers either couldn't obtain a Focus or couldn't get the style or option levels they wanted.

American consumers are seeking out four-cylinder engines wherever they can find them. Sales of the smallest Toyota-brand cars, for example, the Corolla and Yaris, rose by an adjusted 4 percent and 30 percent in June, respectively.

What this means to you: If you're like most Americans and care more about fuel economy right now than anything else, you may have trouble buying what you want — at least at the price you want. — Dale Buss, Contributor