"Dedicated to exposing the lies and impeachable offenses of George W. Bush"


Price of gas defines auto market

By Robert Schoenberger rschoenberger@courier-journal.com
The Courier-Journal
June 2, 2006

High gasoline prices pushed buyers toward more fuel-efficient vehicles last month, with Toyota reporting a 38.7 percent increase in sales of gas-electric hybrids and most automakers seeing falling demand for sport utility vehicles.

"The pinch at the pump has made small cars part of the big picture, right along with hybrids," said Toyota Division General Manager Jim Lentz.

At Ford, sales of the Explorer SUV, built at the Louisville Assembly Plant, dropped 14.4 percent, to 16,717, from May 2005, the smallest decline since August. Ford sales analyst George Pipas said the Explorer results were surprising given the high gas prices, but he noted that sales are still down significantly.

"Gas prices are top-of-mind among car buyers … and you see that sprinkled around our sales report," Pipas said.

The Explorer figure includes 2,700 Sport Trac pickup versions. The Sport Trac was launched in late February and has been at dealerships in large volumes for about two months. In April, Ford sold 2,500 of the pickups.

Overall, Ford sales dipped 2 percent as rising sales of cars and small SUVs helped overcome declines in larger SUVs and pickups. Ford's F-Series pickup line, which includes Super Duty trucks built at Louisville's Kentucky Truck Plant, slipped 5.8 percent to 70,175.

Still, Ford fared better than General Motors and DaimlerChrysler's Chrysler Group, rivals that reported double-digit sales declines.

At GM, both car and SUV sales plunged, sending overall results off 12.2 percent.

At Chrysler, five vehicles saw sales increases during May -- the Dodge Sprinter commercial van, the Dodge Charger sedan, the new Dodge Caliber compact car, the new Jeep Commander SUV and the Chrysler Town & Country minivan. Falling sales for other sedans and SUVs pushed overall results down 11 percent.

Rebecca Lindland, an analyst with Global Insight in suburban Boston, said Ford's relative strength was surprising, given that it traditionally relies as much on SUVs and trucks as do GM and Chrysler. She said that Ford had good timing with the launch of its Fusion sedan late last year and that its competitors appear to be cutting back on incentives and promotions.

"GM especially is really biting the bullet and taking the strong medicine to get back to profitability," Lindland said. That automaker has announced a new promotion to offer about $1,000 a year to help buyers offset rising gasoline prices, but Lindland said overall transaction prices are not much lower than they were a year ago.

The same trends that pushed sales down at Ford, GM and Chrysler sent sales higher at Toyota and Honda.

In addition to selling a record number of hybrids, Toyota sold more than 8,000 Yaris subcompact cars, a new vehicle that starts at about $11,000 and gets about 37 miles per gallon. Toyota's youth-oriented Scion line, a group of three small cars, also sold well.

Sales of the redesigned Camry sedan, made in Georgetown, Ky., rose 7.9 percent to 43,112, including 3,032 hybrid models. Toyota will start making the hybrid version of the Camry in Georgetown in October.

Since the beginning of the year, Toyota has sold 67,420 hybrid models.

Because it passed the 60,000 sales level in the second quarter, federal income tax credits for Toyota hybrid buyers will start phasing out.

People who purchase by September will receive full credits of as much as $3,150 for the Prius. Starting in October, the credit will be cut in half. In April, it will shrink to 25 percent of the original value, and it will expire in October 2007.

Like its competitors, Toyota had weak sales for its larger SUVs and pickups. Demand for the Sequoia SUV, assembled in Princeton, Ind., plummeted 35.6 percent, while the Princeton-built Tundra pickup declined 24.5 percent.

Honda sales climbed 18.5 percent, driven by sales of its new Fit subcompact and Ridgeline pickup.

The biggest loser among the Asian brands was Nissan, which reported overall sales fell 7.3 percent. Sales were down virtually across the board, but the 350Z sports car and the Murano crossover posted gains.

Reporter Robert Schoenberger can be reached at (502) 582-4669.

Original Text