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Ford US Motor Sales Continue Drop

Companies / US Auto's Jun 04, 2007 - 12:06 AM GMT

By: Submissions

Companies This season would probably be the end of Ford Motor Company's 76-year domination as the second-biggest seller of vehicles in the United States.

Toyota is one of the major reasons for such decline as the company may take the place of Ford, maker of quality Ford Thunderbird performance parts . According to analysts survey as reported recently in Bloomberg, for a seventh straight month, Ford's sales may have dropped in May. From January to April, Ford's U.S. sales had declined to 50,242 from 2006's first four months sales of 232,922 units, a very worth regretting 182,680 decrease.

Dennis Virag, the President of Automotive Consulting Group in Ann Arbor, Michigan believes that there is no need for too much debate regarding Toyota's taking over to Ford because it will really happen in just a short span of time.

Since 1931, Ford has been the second in the US sales after General Motors Corporation.

Based on the average estimate of eight analysts in the Bloomberg survey, Ford' vehicle sales for May declined 9.3 percent from last year's sales. While according to a Banc of America Securities auto analyst in New York by the name of Ronald Tadross, Japanese manufacturer Toyota has earned 6 percent.

The same survey revealed that the annual automotive industry sales rate in May was probably 16.1 million units. If that would happen, that would be the lowest for this year.

As increasing fuel prices have prevented car enthusiasts from buying cars, so far this year, industry sales have increased just once and that was in March. And according to the American Automobile Association, during that month, the average price per gallon of gasoline reached an all-time high of $3.23.

Meanwhile, from its first monthly sales decline in two years on demand for Prius gasoline-electric hybrid vehicles, Toyota rebounded in May. The Chief of Ford's sales, George Pipas, said Dearborn, Michigan-based Ford sales declined as the company continued to cut low-profit sales to rental speeds up. He said that the sales of F-Series pick ups probably declined due to the hike in the prices of gasoline. According to him, the pick ups account for almost a quarter of the automaker's total sales.

He added that the automaker's drop for May will not be as sharp as last month's decline of 13 percent. The two crossover sort-utility vehicles, the Ford Edge and Lincoln MKX helped the company's retail sales. These vehicles blend the features of passenger cars with the SUV's truck-like qualities.

As regards Chrysler and GMC, based on the average adjusted estimates in the Bloomberg survey, DaimlerChrysler AG's Chrysler sales earned 3.5 percent and GMC has rose 0.2 percent.

Richard Colliver, the Executive Vice President of Honda's U.S. sales unit, said that their company probably had a 2 percent increase.

Fro this month, there were 26 selling days, making it 1day more than May 2006. So for the difference in days, the analysts' estimates for individual automakers are adjusted. Unadjusted percentage comparisons will be reported by Bloomberg and some car manufacturers. And these would be about 4 percentage points higher.

Toyota of Toyota City, Japan overtook Ford in becoming the second largest car maker in terms of global sales in 2003. And this year, Toyota is poised to steel the number 1 slot from GMC after exceeding the American auto maker in the first three months. This happened for the first time.

According to New York-based Credit Suisse analyst Chris Ceraso, the new products like the Jeep Patriot and Dodge Nitro SUVs, probably contributed in Chrysler's gaining of 5 percent. DaimlerChrysler has agreed to sell 80.1 percent of Chrysler to Cerberus Capital Management LP, a New York buyout firm. Last April, Chrysler was the only U.S. car maker to augment its sales and for the entire industry, it is one of just three.

According to Robert Barry, an analyst in Goldman Sachs in New York, General Motors may say that its sales increased 1 percent during May even as sales of large SUVs were hindered by high gasoline prices. He said that large pickups, such as the GMC Sierra and Chevrolet Silverado, will somewhat remain under pressure because these vehicles account for almost 20 percent of GMC's sales in the U.S.

Other analysts that forecasted the sales of millions of vehicles were Peter Nesvold (Bear Stearns), Jesse Toprak (, Jon Rogers (Citigroup), Richard Kwas (Wachovia), and Himanshu Patel (JPMorgan).

The trends for the seasonally adjusted annual rate or SAAR are based on forecasts from eight analysts and a survey of 23 economists. The estimates of the analysts are based on daily selling rates and are adjusted to suit for May 2007 with 26 selling days.

By Evander Klum

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