(See Corrections and Amplifications item below.)
U.S. auto sales tumbled 18% in June, from June 2007, as sales of trucks and sports-utility vehicles continued to fall and auto makers ran short of the fuel-efficient vehicles like compacts and hybrids that consumers are flocking to.
Sales of cars and light trucks in June, typically a strong month, fell to 1,189,108, according to sales figures from Autodata Corp. The seasonally adjusted annualized sales pace was about 13.6 million vehicles, below the year-earlier level of 15.7 million vehicles.
Most major auto makers suffered significant drops. General Motors Corp. reported an 18% decline to 260,457 cars and light trucks, enough to retain its position as top car seller ahead of rival Toyota Motor Corp. GM increased sales late in the month by offering big rebates and no-interest loans. Before the blow-out sale, GM was at risk of being beaten for the first time by Toyota.
June U.S. Auto Sales
Toyota's sales fell 21% to 193,234 vehicles. It was an astounding drop for a company that has been consistently outperforming its Detroit-based rivals. Ford Motor Co.'s sales dropped 28% to 166,461, its worst June sales result since at least 1990, according to Autodata. Chrysler LLC reported a 36% drop in sales to 117,457 vehicles, pushing its market share below 10%, for the first time in decades.
One of the few to buck the trend was Honda Motor Co., whose sales rose 1.1% to 142,539, thanks to strong sales of its Civic compact and Accord sedan. Sales of Honda's passenger cars were up 26%, more than offsetting its decline in truck sales.
Other car makers said they could have sold more vehicles in June but didn't have enough of the models that customers wanted.
"In some cases we've been outright constrained where dealers were just out of cars," said Mark LaNeve, GM's sales chief on a conference call. GM estimated vehicle shortages cost the auto industry 40,000 sales last month.
GM plans to extend its incentive offerings into July. It had been trying to get away from big rebates.
One problem with incentives is that they tend to only lift sales for a short time. In the past, auto makers have seen big declines in sales when the lavish incentive programs end.
Overall, June sales were damped by rapidly rising gas prices, a weak economy, tightening credit and a soft housing market, all factors likely to crimp auto sales in the months ahead, too.
At the same time, auto makers are seeing a shift that was further underscored in June: American consumers long enamored with trucks and SUVs are now looking for fuel-efficient cars. Sales of Ford's SUVs fell 55%, and its formerly top-selling truck line dropped 38%. Toyota sold about two-thirds fewer light trucks than it did a year earlier.
This exacts a painful toll on the Detroit-based auto makers because they are heavily reliant on larger vehicles. All of Detroit's Big Three are scrambling to change their production lines by closing truck factories and adding shifts to small-car factories. The market share of the domestic producers fell to 46% from 50%.
"Every new plant built in recent years has been a truck plant. There just isn't a lot of capacity out there for cars," said Rebecca Lindland, an industry analyst with Global Insight in Lexington, Mass. "They're pumping out vehicles as fast as they can, but everybody's fallen into this trap."
Their Asian rivals have fared better thanks to more-robust supplies of cars and deeper pockets to withstand a stagnant U.S. economy.
Honda, for example, has the capacity to build 400,000 Honda Civic small cars annually, while GM can build only 250,000 Chevy Cobalts, according to Global Insight data.
Supplies remain tight even as virtually every factory that builds small cars for U.S. consumers is running at or above capacity.
- Luxury Fuel Economy: See how Mercedes's BlueTEC diesel fares against other upscale sedans that lead the class in fuel efficiency.
More on Autos
- What's Hot Off the Lots: June sales data
- GM Shares Plunge to 53-Year Low
- Chrysler: Liquidity Is Ample
- As Car Sales Slump, What's Still Selling
- Chrysler Taps $2 Billion Credit Line
- Page One: GM Slates Sweeping Rebates
- Page One: Ford Reels as Truck Sales Plunge
- Toyota's U.S. Truck Sales Falter
Production constraints are slowing sales of Ford's Focus, a small, fuel-efficient car for which retail sales doubled in May. In June, retail sales of the Focus increased by only 9% because of limited availability of stock.
"Our plants are working -- they're doing everything they can to get more Focus," said Jim Farley, Ford's head of marketing and communications, on a conference call.
Demand for vehicles with hybrid engines was high. Three of the four top-selling cars for the month were hybrids produced by Honda and Toyota.
But companies were unable to produce hybrid cars fast enough to sate the market. Toyota, for instance, is only able to supply the U.S. market with 175,000 Prius hybrid vehicles this year. In the first half of the year, the company sold 91,440, more than half the annual allocation, though Prius sales in June fell 26%. The company has one day's supply of the Prius.
Dealers echoed what the auto executives said.
At the Fox Toyota in Rochester Hills, Mich., general sales manager Chad Ratliff said he has no stock of Yaris, Corolla or any of the Toyota hybrids.
"Honestly, the trend is we don't have any cars," Mr. Ratliff said. "It's been a bit of a nightmare."
Write to Matthew Dolan at firstname.lastname@example.org
Corrections & Amplifications
The comments of Chad Ratliff, general sales manager at Fox Toyota in Rochester Hills, Mich., were incorrectly attributed to Mr. Yaris in an earlier version of this story. Yaris was one of the cars to which he referred.Printed in The Wall Street Journal, page B3