DETROIT, Aug. 2 - Automobile sales in July hit a record high, aided by promotions from American car makers that gave many buyers discounts normally available only to employees.þþThe total number of passenger cars and trucks sold last month in the United States hit 1.8 million, inching past sales of October 2001 when Americans bought 1.72 million vehicles during a zero-percent financing promotion that was started after the Sept. 11 attacks. þþÿThe industry is on fire,ÿ Rod Lache, an analyst with Deutsche Bank, said Tuesday.þþWhen the vehicle sales figures are adjusted for the difference in the selling days from month to month, October 2001 is still the strongest on record. But on an unadjusted basis, last month broke the old record, meaning that more vehicles were sold in July in the United States than any other month in history.þþMindful of the fact that the success cannot last, General Motors, Ford Motor and DaimlerChrysler have begun bracing for the inevitable slowdown once they end the employee discount programs. For now, at least, they are riding high. þþAutomakers last month, particularly General Motors and Ford, benefited from a surge of pickup sales. Pickups and sport utility vehicles were not selling as briskly earlier in the year as gas prices climbed, but now appear to have rebounded because of the discounting offered by the Big Three auto companies. þþÿTruck sales were just phenomenal,ÿ Paul Ballew, the chief industry analyst for G.M., said in a conference call with investors and the reporters. ÿThey just exploded like nothing I've ever seen before.ÿ þþG.M. said its truck sales were up 35 percent, but its car sales decreased 3 percent compared to last July. þþGeneral Motors, which jolted the industry when it began offering customers its employee discount, recorded its best July in 26 years. Overall, sales were up 20 percent over last July when adjusted for the difference in the number of selling days in each month.þþWith both Ford and the Chrysler division of DaimlerChrysler offering similar programs, G.M. saw some of the luster wear off its employee discount plan, which started in June. þþGeneral Motors also backed away from an earlier plan to end the promotion. After Ford and Chrysler extended their programs on Monday, G.M. announced yesterday that its employee discount program will run through Labor Day. It had been scheduled to expire on Monday.þþMr. Ballew said, ÿIt didn't make a lot of sense to us to change horses midstream.ÿ Ford's program will also run through Labor Day and Chrysler has not said when its promotion will expire.þþBolstered by record sales of its F-Series pickup, Ford led the sales surge with a 33 percent jump over last July. It was the best July in the company's history.þþChrysler sales increased 30 percent to give the company its best month on record. Chrysler appears to have hit a chord with its advertising campaign featuring its former company president, Lee Iacocca. ÿWe used Iacocca to create a bit of a stir,ÿ said Gary Dilts, the chief industry sales analyst for Chrysler. ÿIt worked out nicely.ÿ Mr. Dilts added that Chrysler was planning another round of commercials featuring Mr. Iacocca for August.þþAlthough Detroit's Big Three are seeing strong sales, inevitably business will cool. Nearly everyone in the auto industry agrees that the success that the domestic companies have seen with the employee discounts will be followed by a sales hangover.þþÿWhen the employee discount plans are removed there will be a lull,ÿ George Pipas, the chief industry sales analyst at Ford, said. ÿThings tend to even out. September might be an interesting month to look at.ÿþþMr. Ballew, of G.M., said, ÿI will give you that June and July are exceptional months.ÿ He added, ÿLegitimately, there will be some payback.ÿþþSome analysts are already wondering what the next big sales promotion will be. ÿIt's not like the companies are going to go cold turkey off discounts,ÿ said Ron Pinelli, the president of Autodata. ÿThe employee program will go away, but it's just going to be replaced by something else.ÿþþBoth General Motors and Ford are coming off disappointing second-quarter results. Last month, both automakers posted significant profit declines as their North American automotive divisions continued to weaken. Although G.M. reported a 41 percent surge in auto sales for June, it lost $286 million last quarter. Ford's $946 million profit in the second quarter was a 19 percent drop compared to a year earlier.þþG.M. and Ford have taken a battering for much of the year from Asian automakers like Toyota and Nissan, which have had record sales in recent months. In July, the Asian companies continued to have an undeniably strong force in the domestic market, despite the impressive gains from the American Big Three. þþNissan, Toyota, Honda and Hyundai all reported double-digit sales gains last month, and all but Honda said it was their best sales month ever in the United States. þþ
Source: NY Times
