Big Three automakers post double-digit gains

updated 7:33 p.m. ET Aug. 2, 2005

DETROIT - The Big Three U.S. automakers are extending programs that let customers buy vehicles at employee prices after sales for the entire industry leaped to near record levels in July, but analysts warned Tuesday automakers could see some payback this fall.

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group saw their combined results climb 26.5 percent in July. Car sales rose modestly, up 4.2 percent, but truck demand shot up 36.7 percent.

The bevy of deals also helped foreign automakers attract customers. Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. all said July was their best-ever U.S. sales month, even though they didn’t offer similar discounts. BMW and Mercedes-Benz, two of the major European players, set sales records in July as well, as did South Korea’s Kia Motors Corp.

The seasonally adjusted annual sales rate for July was 20.8 million units, the highest since a record 21.8 million rate in October 2001, according to research firm Autodata Corp. That was the month after the Sept. 11, 2001, terrorist attacks, when GM introduced zero-percent financing plans to spur the industry and U.S. economy.

The rate, known as the SAAR, indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2004 were about 17 million.

Of the Big Three, Ford, the nation’s No. 2 automaker behind GM, had the biggest month-over-month increase — 35.5 percent over last July. Sales of Ford, Lincoln and Mercury trucks gained 38 percent, while car sales rose 26.7 percent. The discount gave a lift to what had been a lackluster year for Ford, whose overall sales increased just 1.7 percent in the first seven months of the year versus a year ago.

Ford said its F-series trucks set a record for the highest monthly sales of any vehicle since the 1920s. F-series sales were up 58 percent in July to 126,905. F-series truck sales were up 4 percent for the January-July period.

“I actually saw people smiling this month,” said Ford’s U.S. sales analysis manager George Pipas. “There was a sense of excitement in the results as we progressed through the month, and I think restoring that winning attitude was something you can’t put a price on.”

Chrysler said July results were the highest monthly sales in its history. Chrysler’s business jumped 32 percent over last July, spurred by a 38.6 percent increase in truck sales, including record-setting sales of the Dodge Ram pickup. Chrysler’s overall sales were up 8.9 percent for the first seven months of the year.

GM, the world’s largest automaker, said its sales were up 19 percent over last July. That was less dramatic than the 41 percent increase in June, when GM was the first automaker to introduce an employee-pricing deal, but the company said it was pleased with the results. Paul Ballew, GM’s executive director of global market and industry analysis, said it was the best July for GM since 1979.

GM’s truck sales rose 34 percent in July while car demand was off 4.6 percent. Overall, GM’s sales were up 5 percent for the first seven months of the year, boosted largely by June and July volume.

Sales percentages are adjusted for differences in the number of selling days. There were 26 selling days in July 2005 and 27 in July 2004.

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