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General Motors Co. reported this morning it sold 1.94 million vehicles globally during the second quarter, down 15 percent from a year earlier due to continued economic pressures and a drastic cut in vehicle production.

But compared to the first quarter, sales were up almost 20 percent.

Through the first six months of the year, GM sold 3.55 million vehicles, down 22 percent compared to last year.

Meanwhile, sales outside the U.S. rose to 72 percent of the automaker's total sales, compared to 65 percent a year ago.

"We believe the strength of our products, including the Chevrolet Camaro, Spark and Malibu; award-winning Opel/Vauxhall Insignia; Wuling Sunshine Minivan and others around the world enabled us to weather an historically difficult rebirth of the new General Motors," said Jonathan Browning, vice president, global sales, service and marketing. "We are moving quickly to respond to new market opportunities around the globe and meeting customer needs with fuel-efficient products that offer advanced technology, compelling designs and great value."

GM, which filed Chapter 11 bankruptcy on June 1, emerged from federal bankruptcy court on July 10 after a rapid restructuring and $50 billion in federal aid.

GM lost its title last year as the world's largest automaker by sales when it was overtaken by Toyota Motor Corp.

Fiat SpA, the Italian carmaker that acquired a stake in Chrysler LLC, reported a second consecutive quarterly loss as slumping truck and equipment sales offset an improvement in auto deliveries in western Europe.

The net loss of 168 million euros ($239 million) in the second quarter missed the average estimate of a 158.4 million- euro loss from five analysts surveyed by Bloomberg. Turin-based Fiat had net income of 604 million euros a year earlier.

Fiat, led by Chief Executive Officer Sergio Marchionne, gets about two-thirds of its operating income from the Iveco trucks and CNH agricultural and construction equipment units, where sales declined because of the global recession. Truck deliveries plunged 43 percent and sales of agricultural and construction equipment fell 21 percent at CNH, Fiat said.

“The truck business is facing a collapse in sales,” said Eric-Alain Michelis, an analyst at Societe Generale SA, in a Bloomberg television interview. “CNH is also having a tough time.”

Fiat predicted that the market for trucks and construction equipment will suffer for the rest of the year, with some chance of a recovery in the fourth quarter.

Fiat’s revenue fell 23 percent to 13.2 billion euros, the manufacturer said today in a statement. That missed the 13.96 billion-euro average estimate of 12 analysts.

Chrysler Integration

The carmaker didn’t address progress on integrating Chrysler in its earnings statement, though it reiterated in an analysts’ presentation that the company won’t make a cash investment. CEO Marchionne acquired 20 percent of the maker of the Dodge Challenger and Jeep models last month as it emerged from bankruptcy.

Fiat said it increased market share for autos, especially in Germany, with models including the Grande Punto and Panda hatchbacks. Government-funded incentives for consumers to buy new cars have boosted sales or slowed declines, and have particularly benefited companies such as Fiat that have deep lineups of small cars.

Fiat fell as much as 28.5 cents, or 3.6 percent, to 7.66 euros and was down 2.9 percent as of 3:32 p.m. in Milan trading, giving the company a market value of 9.2 billion euros.

Marchionne, long an advocate of industry consolidation, says a carmaker needs to produce at least 6 million vehicles annually to make money. The Chrysler deal brings production up to 4.5 million a year.

No Opel for Fiat

Fiat lost out on its bid to buy General Motors Co.’s Opel division after it declined to sweeten its offer. GM received three final bids July 20, including from Germany’s preferred candidate, Canadian auto-parts maker Magna International Inc.

“The long-term strategic issue regarding the lack of scale in the car market will continue to weigh on the stock,” said David Arnold, an auto analyst with Credit Suisse in London, who reiterated his advice to sell the shares.

Italy’s largest manufacturer, whose biggest investor is the Agnelli family, confirmed its full-year targets, saying trading profit, measured by earnings before interest, tax, and one-time items, will reach more than 1 billion euros this year.

The maker of Alfa Romeo and Lancia cars reported second- quarter trading profit of 310 million euros, compared with 1.31 billion euros a year earlier.

Revenue at Fiat Auto, which includes luxury brands Ferrari and Maserati, fell 12 percent to 7.4 billion euros, while trading profit fell 36 percent to 227 million euros.

Sales at CNH fell 21 percent to 2.9 billion euros and trading profit declined by more than half to 123 million euros. Sales of trucks and commercial vehicles at its Iveco unit dropped to 1.8 billion euros, while trading profit slumped to 18 million euros from 248 million euros.

Fiat said its net debt declined to 5.7 billion euros from 6.6 billion euros at the end of the first quarter. That compared with a 5.99 billion-euro average estimate by three analysts compiled by Bloomberg. Fiat reported a loss of 410 million euros in the first three months of this year.

The Hyundai USA automaker was the first to honor the government-sanctioned program, resulting in 7 percent of its sales.

Fountain Valley-based Hyundai USA became the first company to implement the government’s Car Allowance Rebate System (CARS) incentives on July 2. The program – also known as "cash for clunkers" – accounted for 7 percent of Hyundai’s sales in the first week of its launch.

The National Highway Traffic Safety Administration (NHTSA), signed into law by President Obama, is a federal program that offers additional incentives to buyers opting to trade in a less fuel-efficient vehicle in order to purchase a new, more fuel-efficient vehicle.

Hyundai's rollout enables buyers to receive the full rebate allocated under CARS when an eligible trade-in is exchanged for a qualifying model at a participating Hyundai dealership.

The fuel-efficient Hyundai Elantra was the most popular model purchased under the CARS program, making up 41 percent of sales. Elantra recently earned top honors in the 2009 J.D. Power and Associates Initial Quality Study for the highest initial quality in the compact car segment, and is a "Top Pick" from Consumer Reports.

If BMW and Lexus sales continue at their current paces, the Bavarian automaker could topple its Japanese rival and become the best-selling luxury brand in the U.S.

According to Automotive News, BMW and Lexus sales are neck and neck, with BMW selling about 3600 more vehicles than Lexus through the month of May. So far this year, Lexus's sales have collapsed by 37.2 percent compared to the same time period last year, while BMW's sales have declined 30.5 percent. BMW's market share now matches Lexus's at 1.9 percent.

"This year's emphasis is on maintaining our market share and even growing our share," said Jan Ehlen, spokesman for BMW North America. "If this results in remaining in the top spot of the premium market, that would be a nice bonus."

According to Automotive News, BMW has been in the second place spot for eight years straight. Before Lexus achieved its stranglehold on top, it was traditionally held by American automakers; Cadillac dominated from 1946 through 1997, and Lincoln nabbed it in 1998. But so far this year, European luxury makers--including Audi, Porsche, Jaguar, Land Rover, Mercedes-Benz and BMW--have pushed their collective market share up by almost a full percentage compared to last year.

The U.S. has become BMW's biggest market, with 23 percent of its 1.27 millions sales last year coming from the U.S. Germany is its second-biggest market, where it sold 19.6 percent of its vehicles.

John McCandless, a spokesman for Toyota Motor Sales U.S.A., dismissed the title of sales leader as superfluous--though he did mention that sales could be boosted by the introductions of the 2010 Lexus IS C and 2010 Lexus HS250h.

"Volumes can vary," he said. "Meeting the needs of our customers is what's important."

Car makers in Europe felt something of a reprieve in June, as incentives from governments and dealers stemmed or reversed sales declines.

New-car registrations in France rose to 235,407 in June from 219,754 a year earlier, according to data published Wednesday by the French Automobile Manufacturers Association.

The association said the government's temporary cash incentives for car owners to scrap their old vehicles and buy new ones motivated car buying. But discounting by car makers and dealers also played a prominent role. Incentives accounted for 20% of French June new-car registrations, according to the association.

The rapid decline in Spanish car registrations during recent months also eased in June thanks to government aid, Spanish car manufacturers' association Anfac said Wednesday. Car registrations fell 16% from a year earlier in June after falling 39% in May and 46% in April, according to Anfac.

The government subsidies boosted individuals' car registrations 15% in June from a month earlier, Anfac said. It was the first month in more than two and a half years where registrations by individuals increased compared with the previous month.

Italian car sales bounced higher in June, rising 12.4% compared with June 2008, as government payments to people who trade in old cars for newer, less-polluting ones kicked in, data showed Wednesday. Overall, Italian new car registrations in June increased 12.4% to 209,315 vehicles. That compares with an 8.6% annual decline posted in May.

Along with the car-sales incentives, "the improvement of the economy, or at least expectations of improvement, could have played a factor" in June's rebound, according to Italian auto analysts Centro Studio Promotor.

Hybrid car sales in June were up 9 percent from a year ago and rose 2 percent compared to last month—outperforming the overall new car market that was down 28 percent from June 2008 and off 7 percent from May.

June hybrid sales suggest that hybrids are recovering more quickly than the overall car market—just as they defied the economic downturn several months after overall car sales started to decline in 2008. June marks the sixth consecutive month of higher hybrid sales.

Nationally, car dealers sold 26,205 hybrids in June, the highest one-month total in 13 months.

Hybrid car sales numbers exceeded 3 percent of the new car market, and could reflect the beginning of an anticipated long-term trend in which hybrid market share grows by as much as 1 percent every year.

Dozens of new hybrid models will be introduced in the next few years. The world’s largest carmakers are significantly investing in increased production capacity for hybrid cars and advanced auto batteries.

The overall market continues to suffer, but declining sales have begun to slow down for four of the six major carmakers. Ford reported the smallest drop of 10.7 percent. Jesse Toprak, executive director of industry analysis for Edmunds.com told Associated Press, “It is unlikely things will get any worse."

The Toyota Prius led the hybrid pack with 12,998 sales, representing 49.6 percent of all hybrid sales in June. The vast majority of Prius sales—85 percent, according to Toyota—came from the new 2010 model. The introduction of the new Prius apparently affected sales of the 2010 Honda Insight and Honda Civic Hybrid, which declined by 25 percent and 42 percent respectively, compared to last month. Sales of the Ford Fusion Hybrid continued to gain momentum, jumping nearly 10 percent compared to May.

Rising gas prices—from $2.28 per gallon in May to $2.64 last month—may have contributed to an increase in hybrid sales in June.

U.S. auto sales fell 27.7 percent in June, marking the smallest drop for the industry in nine months while dashing hopes that demand would rise to a 2009 high.

Ford Motor Co.'s 10.7 percent slide, its narrowest decline in 16 months, wasn't enough to keep the seasonally adjusted sales rate from slipping to 9.5 million, below analysts' projections of 10 million. June's SAAR retreated to April levels, before the Chrysler and General Motors bankruptcies, and was well below the 13.1 million from June 2008.

Still, the industry is recovering, said Patrick Archambault, an analyst with Goldman Sachs.

"Every single month has been better," he said. "We're in a bit of a holding pattern here for one month, but there's a lot of market drivers that are turning positive that should really help sustain an improvement once you get into the second half" of the year.

Ford fared better than other major automakers. It now stands at No. 2 in U.S. sales through the first half of the year after ceding the spot to Toyota Motor Sales U.S.A. Inc. in 2007. Ford's market share grew to 16.1 percent, ahead of Toyota's 16.0 percent and lagging GM's 19.7 percent.

GM's June sales were down 33.4 percent, and Chrysler Group LLC tumbled 41.9 percent, as both U.S. automakers slashed deliveries to fleets. Toyota slid 31.9 percent for its second-smallest drop of the year. Nissan North America's 23.1 percent decline was its smallest since its last monthly sales gain, in August.

American Honda, the only one of the top six automakers to post a sales gain in June of 2008, slid 29.5 percent last month.

Subaru had the only increase, up 3.4 percent. The Hyundai recorded a 24 percent decline, its weakest performance this year, while affiliate Kia fell 5.1 percent. BMW Group's sales were down 20.3 percent, their smallest slide since January.



Back below 900,000

Industry sales fell to 860,101, after rising above 900,000 in May for the first time this year.

Sales rates have ranged from 9.1 million to 9.9 million so far this year, stuck at 27-year lows. June's results, depressed as they were, managed to reduce the decline for the year to 35.1 percent.

Last month's percentage changes come in comparisons to June 2008, when the industry fell 18.3 percent. The industry's decline accelerated last summer as gasoline prices soared to their highest point on record, with AAA data stretching back to 1974. Sales rates plunged even more dramatically in the fall as the United States fell deeper into a recession that's now in its 20th month.

Car sales fell 31 percent last month, and trucks slid 23.1 percent, gaining some share after last summer's fuel prices curbed their sales.

Ford posted overall increases for its Fusion sedan, Escape crossover, Expedition SUV, Ranger truck and the Volvo brand. Retail sales for F-series trucks also increased from the previous year, the automaker said.

The second quarter was a "breakthrough" for Ford, Jim Farley, group vice president for marketing and communications, said on a conference call. While sales didn't increase, consideration and brand image did, he said.

Ford also benefited from year-ago comparisons that no longer include Jaguar and Land Rover. Monthly sales for those brands have been tallied by their new owner, Tata Motors, since June of last year.

Chrysler clearance

Chrysler said today it would run a July "summer clearance" promotion. The company will offer 0 percent financing for 60 months through GMAC Financial Services on some 2009 models, or up to $4,000 cash. Current Chrysler Group owners also may receive up to $1,000 cash on some 2008 and 2009 models.

Chrysler said it also will add up to $750 to the government's cash-for-guzzlers voucher for its current owners.

Chrysler gave June incentives worth $4,873 per vehicle sold, according to the auto information site Edmunds.com. The industry average was $2,930.

The automaker's fleet sales plunged 95 percent in June, while deliveries to individual customers fell 16 percent. Chrysler emerged from bankruptcy 10 days into the month after eliminating 789 dealerships.

GM's decline included a 49 percent drop in fleet sales. Both it and Chrysler had extended plant shutdowns in June.

Buick and Pontiac brands posted GM's smallest sales declines -- 10.7 percent and 16.4 percent, respectively. On Tuesday, GM said it would offer 0 percent financing for up to 72 months on most of its Pontiac brand and some other vehicles. It entered bankruptcy June 1 and plans to phase out Pontiac next year, along with selling Hummer, Saab and Saturn.

Hope for the second half

June marked the 24th year-over-year monthly decline in 25 months. But analysts still foresee some recovery in the next six months.

Goldman Sachs' Archambault pointed to results of the consumer confidence index measured by the Conference Board, a market information group. It had grown steadily from record-low levels in February, with data stretching back more than 40 years. The consumer confidence index took a small hit in June, but was still double February's levels.

"On a six-month lag basis, consumer confidence has been a strong predictor, so it still points to a back-half recovery," Archambault said.

Analysts forecasting a second-half improvement in sales also say the cash-for-guzzlers legislation President Barack Obama signed last week will improve car-buying interest and perhaps generate sales.

The government may not complete rules for the program until July 23, so consumers who were waiting for the law to pass may stay home for another month, said market analyst Chris Hopson, of IHS Global Insight.

The measure offers vouchers of as much as $4,500 to consumers who scrap gas-guzzling vehicles and buy new ones with better fuel economy. Predictions of the law's effectiveness in boosting sales have been mixed. But Goldman Sachs' Archambault said it should bump sales rates starting in August.

He said: "If all it does is add another 100,000 units to August, that's going to add another 1.2 million units to the SAAR."

Sales of Bayerische Motoren Werke AG’s BMW and Toyota Motor Corp.’s Lexus, the most popular U.S. luxury brands, fell less in June than the previous month as buyers began returning to showrooms.

U.S. sales totaled 16,744 for the BMW brand, a 20 percent drop from a year earlier, and better than the 28 percent decline in May, Munich-based BMW said. Lexus reported selling 16,874 vehicles, a slide of 17 percent, better than the previous month’s 36 percent fall.

Luxury sellers “are seeing a bottom, they think the worst has past,” said Milton Pedraza, chief executive officer of the Luxury Institute LLC, a New York-based consumer-research firm.

Lexus took the lead from BMW in June after the German automaker sold the most vehicles for three months straight. BMW held onto the top spot this year overall, selling 93,563 vehicles, compared to Lexus’s 90,060, challenging Lexus’s nine- year reign as the top seller of luxury autos in the U.S.

Daimler AG’s Mercedes-Benz brand sold 15,155 vehicles for the month, a 23 percent drop that was better than May’s 31 percent fall, Stuttgart, Germany-based Daimler said. The total including the Smart brand was down 26 percent to 16,271 vehicles, better than May’s 33 percent fall, the company said.

‘Still Underwater’

Nissan Motor Co.’s Infiniti sales for June were down 32 percent to 6,304 units, said U.S. Vice President Al Castignetti. That fall was better than May’s 38 percent fall for the Tokyo- based automaker. Honda Motor Co.’s Acura division fell 34 percent to 8,280 vehicles, compared to a 36 percent drop in the previous month for the Tokyo-based automaker’s luxury unit.

Not all luxury brands did better than May. Dearborn, Michigan-based Ford Motor Co.’s Lincoln luxury brand fell 27 percent to 7,137 vehicles, after reporting a 2.4 percent increase in the previous month. The drop was more than double Ford’s overall 11 percent fall.

Detroit-based General Motors Corp.’s luxury division, Cadillac, fell 41 percent to 8,473 vehicles, compared to a 40 percent drop in May, according to a statement.

Growth for luxury segments of the economy will “continue to be slow for the next 12 to 20 months,” said the Luxury Institute’s Pedraza. “People are feeling better, but many are still underwater as the last 12 months have been horrible.”

Toyota Motor Corp. and Honda Motor Co., Japan’s two largest carmakers, slowed the decline in domestic auto sales last month as their new hybrid models and government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, fell 14 percent to 243,342 vehicles, the Japan Automobile Dealers Association said in a statement today. Toyota sold 110,677 units excluding Lexus brand cars, down 11 percent. Honda posted a 5.7 percent gain, and Nissan Motor Co., Japan’s third-largest automaker, sold 21 percent fewer units.

The pace of decline in auto sales slowed last month from 29 percent in April and 19 percent in May, as government subsidies and tax cuts helped boost sales of Toyota’s new Prius and Honda’s Insight gasoline-electric hybrid cars. Monthly sales may flip to a year-on-year increase as early as August, according to auto consulting company CSM Worldwide.

“The subsidies and tax cuts are kicking in,” said Yoshiaki Kawano, a CSM analyst in Tokyo. “The numbers will improve as gasoline prices were surging around this time last year, putting a damper on car sales.”

Toyota on June 25 said it has booked 200,000 domestic orders for the third-generation Prius, introduced in May. It was Japan’s best-selling standard car that month, surpassing Honda’s Insight.

Under a government program started June 19, consumers can apply for a 250,000 yen ($2,600) subsidy if they scrap a car more than 13 years old to buy a new one and 100,000 yen for a new car purchase without scrapping an old one.

Car dealers have distributed 260,000 applications for the subsidies, Takeshi Fushimi, director of the Japan Automobile Dealers Association, told reporters today. The subsidies are available retroactively for purchases from April 10.

* June 2009 Auto Sales: Toyota Leads Japan Output Drop
* June 2009 Auto Sales: Signals of Auto Recovery
* June 2009 U.S. Auto Sales: GM, Toyota, Ford Lead Top 10 Million Rate

The government expects the incentives to lead to the sale of an additional 690,000 vehicles this fiscal year. Electric, hybrid, natural gas, and some diesel vehicles also qualify for an exemption from the country’s weight and purchase taxes.

Still, domestic sales are expected to be the worst in three decades, as wages fell for a 12th straight month and the jobless rate rose to a five-year high in May. The Japan Automobile Manufacturers Association predicts domestic industrywide sales will drop 8.5 percent to 4.3 million units in the year ending March.