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Ford sales raise hopes of turnaround

Ford posts smallest decline in sales in more than a year, a sign that battered auto industry could be ready to rebound.

July 1, 2009: 12:40 PM ET

NEW YORK Ford Motor reported a modest decline in U.S. sales in June, feeding hopes that the industry may have finally turned the corner following the dramatic drop in sales that forced two of Ford's rivals into bankruptcy.

Ford's June sales declined 11% from a year earlier, the smallest year-over-year decline since February 2008. Ford's sales also came in better than the nearly 16% drop forecast by sales tracker Edmunds.com.


Sales declined 4% from May though, ending a string of four straight months of improved sales on a month-over-month basis.

Still, the stronger than expected sales from Ford could lead to industrywide light vehicles sales topping a seasonally adjusted annual rate of 10 million for the first time this year.

During the month, Ford (F, Fortune 500) rival General Motors (GMGMQ) filed for bankruptcy protection, while Chrysler emerged from bankruptcy and formed an alliance with Italian automaker Fiat (FIATY).

All major automakers, including Asian rivals Toyota Motor (TM) and Honda (HMC), are still expected to post double-digit year-over-year declines in U.S. sales for June when they report results later Wednesday, despite signs of improvement.

LINK:June auto sales figures raise hope of turnaround - Jul. 1, 2009
 

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Automakers' June U.S. results:

June Sales: Chrysler Down 42%, Toyota Off 38%, GM Down 37%, Ford Dips 14.4%

July 1, 2009
UPDATED at 2:30 p.m.:

Sales of Ford vehicles in June were down 14.4 percent compared to June 2008, better results than had been expected by Wall Street and the winner among the world's big automakers.

General Motors' June sales were down 33.6 percent compared to June 2008 but were actually UP 10 percent compared to May, the four consecutive month-to-month increase for the bankrupt former auto giant. That's a victory, anyway you look at it.

Chrysler said its June sales were down 42 percent, but consider this is a company that just emerged from bankruptcy, needed to partner with Fiat to avoid liquidation and had shut down its production plants since spring. So, all told, a 42-percent drop is not so bad.

Toyota, the world's largest automaker, said June sales were down 38 percent compared to June last year. Fitch ratings downgraded Toyota's credit rating for the second time in seven months, dropping the automaker from "AA" to "A+".

Other automakers' June U.S. results:

-- Honda was down 32.4 percent.

-- Nissan was down 23.1 percent.

-- Porsche was down 66 percent. (Porsche sells very few cars in the U.S., anyway; only 902 in June, down from only 2,650 in June 2008.)

Forecasters predicted Ford's June sales to be down 16.9 percent compared to last year.

Sales of Ford's new vehicles -- the Fusion, the Flex and its hybrid cars -- led the month.

Ford's June sales were down only 10.7 percent from May, which is the least-bad month-to-month result since July of last year.

Ford is the only of the Big Three Detroit automakers to so far refuse federal bailout money, though it recently got its share of the government's $25 billion meant to help automakers make more fuel-efficient vehicles.

GM released a most curious statement moments ago that essentially says: "Please stop trading our stock above $1. We are a bankrupt company. Our stock is worthless."

Here's the full text of the GM statement:

"GM management has noticed the continuing high trading volume in GM's common stock at prices in excess of $1. GM management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, GM management strongly believes all such claims will not be fully satisfied, leading to its conclusion that GM common stock will have no value."

Could it be short-covering? Even this long after GM declared bankrutpcy?

LINK: The Ticker - June Sales: Chrysler Down 42%, Toyota Off 38%, GM Down 37%, Ford Dips 14.4% - Economy Watch *
 
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