- The Washington Times - Thursday, August 2, 2001

DETROIT (AP) U.S. automakers' July vehicle sales fell more than 9 percent compared with the year-ago period, suggesting the U.S. auto market is slowing down faster than analysts had predicted.

German automakers Volkswagen AG, Audi AG and BMW AG all reported strong U.S. sales in July, while Asian automakers' sales were flat.

"The conditions in the economy are beginning to trickle down to the car market," said David Healy, an analyst with Burnham Securities.

Many analysts had predicted a falloff of 4 percent to 7 percent from last July, which was part of a record-setting sales year for the automakers.

Sales of vehicles produced by General Motors Corp. were off 8.8 percent, Ford Motor Co. saw a 14 percent sales decline, and vehicle sales for the Chrysler Group of DaimlerChrysler AG were off more than 3 percent.

GM efforts to beef up its pickup and sport utility lines are reaping benefits, however, with sales up 2 percent last month.

"Trucks remain a big plus for us," said company sales analyst Paul Bellew. "They make up about 56 percent of retail deliveries."

Sales of GM passenger cars, however, dropped 19 percent, and Mr. Bellew said improving performance in that segment would be a challenge.

For the first seven months of the year, GM sales are off 6.6 percent from the same period last year.

Ford passenger-car sales dropped 18 percent, and light truck sales were off 11 percent. While Ford said its Explorer sport utility vehicle recorded its second-best July sales month in its history, last month's sales of the SUV were off almost 9 percent from July 2000. Its upscale mate, the Mercury Mountaineer, however, saw sales increase by 19 percent from July of last year.

Ford sales analyst George Pipas said despite the drop, Explorer had maintained its share of the sport utility vehicle segment with 27.7 percent of sales.

Sales of the Ford Focus, an entry-level compact car, plummeted almost 29 percent last month.

For the first seven months of the year, Ford's total vehicle sales were down 12.1 percent from the same period a year ago.

Mr. Pipas said it was becoming increasingly difficult for U.S. automakers to maintain market share because of competition from European and Asian manufacturers.

Specifically, the imports are becoming more aggressive in the light truck and sport utility segments, Mr. Pipas said.

He said the number of dealers selling Asian vehicles was increasing, pointing out that retail outlets for Korean-made cars and trucks had doubled from about 600 in 1996 to about 1,200 today.

South Korean automaker Daewoo Motors reported a 71 percent increase in its U.S. sales for July from a year ago.

Chrysler's passenger car sales fell 11 percent, while truck sales fell 1 percent from July 2000 levels.

Chrysler minivans, however, continued their strength, showing a 1 percent increase in sales in July compared with the same month a year ago.

Sales of the new Jeep Liberty were strong as well, with 10,562 units sold, a pace strong enough to spark the company into increasing annual production by 60,000 units.

For the year to date, Chrysler Group sales are off 9.5 percent.

Sales figures from the U.S. automakers do not include their foreign brands.

Sales trends seemed to be at odds with the slowing economy, as less-expensive passenger cars fell to the wayside in favor of pricey pickups and sport utility vehicles.

Toyota Motor reported its best July on record, with total vehicle sales 5.8 percent better than last July.

The Japanese automaker reported it had reached the 1-million-unit milestone for the year during July the first time in its 44-year history it reached the mark so early in the third quarter.

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