http://biz.yahoo.com/ap/060829/auto_sales_outlook.html?.v=3AP
Slow Aug. Sales Seen for U.S. Automakers
Tuesday August 29, 4:29 pm ET
By Tom Krisher, Associated Press Writer
Analysts Expect Slow August Sales for U.S. Automakers; Asian Markets to Benefit From Shift
FARMINGTON HILLS, Mich. (AP) -- Just a few miles from General Motors Corp.'s world headquarters in Detroit, Laurie Shedron gave up her 2002 Pontiac Grand Am GT for a brand-new silver Honda Civic.
She didn't even look at another Pontiac, instead going for a Honda because of its reputation for fuel economy and reliability. Unfortunately for the domestic Big Three, more people are making the same decision as Shedron.
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Some analysts say foreign automakers have more to offer in the current market, and they expect that trend to continue when August sales figures come out on Friday. The biggest beneficiaries of the shift, those analysts say, will continue to be Honda Motor Co. and Toyota Motor Corp., both of which are expected to have good months.
At Suburban Honda in the Detroit suburb of Farmington Hills, the prediction played itself out on Monday as Shedron picked up her new car.
"I wanted to try this," said the 50-year-old resident of nearby Plymouth. "I hear they last a long time. This way you can hold off on it longer and put on more miles."
Jesse Toprak, chief economist for Edmunds.com, an automotive Web site, predicted that auto sales overall will be up about 1 percent over a relatively slow August 2005, but he looks for 12 percent declines at DaimlerChrysler AG's Chrysler Group and Ford Motor Co. due to their heavy reliance on trucks.
Goldman Sachs analyst Robert Barry also expects Chrysler to be down 12 percent and Ford off 11 percent.
Last month, Toyota Motor Corp. -- the most formidable of the foreign competitors -- outsold Ford for the first time, but Toprak said that may not happen again this month.
Toprak expects Honda sales to be flat with August 2005, when the company had a big sales month.
"In the short term, we can't expect too much from Chrysler and Ford simply because they will not have competitive products in the marketplace," Toprak said.
Although Ford sales likely are to drop when compared to last August, Toprak predicts they will rise 5 percent compared to July, boosting its sales back above Toyota.
Toyota should see an 18 percent increase over August 2005, but its sales likely will be flat when compared to July, Toprak said.
Honda sales should continue to grow slowly, Toprak said, largely because of the Civic and Accord cars.
Barry predicted flat GM sales, while Toprak is forecasting that GM will see a 10 percent increase over August 2005. The reason is because last August, GM's employee pricing for all promotion came to an end and the company's sales slumped.
Still, GM has momentum that Ford and Chrysler don't have, Toprak said. Its new large SUVs are selling well despite high gas prices, and it has more fuel-efficient models than its domestic rivals.
"Of all the domestic three, they appear to be the one in a little bit better position at the moment," Toprak said.
Barry, in a note to investors, predicted domestic car sales would drop 3.7 percent in August, while imports would rise 21.6 percent.
Domestic light truck sales likely will drop 8.4 percent, while import sales could rise just over 10 percent, Barry predicted.
Erich Merkle, forecasting director for IRN Inc., a Grand Rapids-based automotive consulting firm, said rising interest rates and a softening economy nationwide, especially in the housing industry, is likely to hurt truck sales and the Big Three in August.
But he said Honda should continue its growth because all of its models are selling well.
At Suburban Honda in Farmington Hills, sales are up 20 percent when compared to the first seven months of last year largely because of the Civic, said Russ Ashabranner, general manager.
On Monday, Rachel Glegola, 30, of Dearborn Heights, bought a Civic mainly for the same reasons that Shedron did. She cares far more about gas mileage and reliability than she does about styling.
"I know they're reliable. I know five, six, seven years down the road, it'll still be running," she said.
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I agree from experience, Hondas and Toyotas take a licking but keep on ticking...