US: Car sales get a boost in June

Detroit Free Press - Falling gas prices and more aggressive discounting by two Japanese automakers have pulled June car sales out of their doldrums of May, according to analysts and forecasters, but the market remains weaker than its pace in the first four months of the year.

"There is some increase due to more incentive spending, especially from Honda and Toyota," said Jesse Toprak, who tracks sales for TrueCar.com. "Even so, Toyota is still going to be down 10% compared to last year and Honda will be down about 14%."

The March 11 earthquake and tsunami damaged some assembly and parts plants in northern Japan, causing Toyota, Honda and Nissan to delay production of more than 500,000 vehicles. They are beginning to make up that lost production, but Nissan has been hurt less because it has only 25% of its global production in Japan, compared with 45% for Toyota. Honda assembles in Japan only 13% of the vehicles its sells in North America.

Eight of Toyota's 12 North American-built models returned to pre-earthquake production on June 6. Total North American production is expected to match that level in September, said Steve St. Angelo, head of Toyota's North American manufacturing and engineering.

Honda said it expects its North American factories to return to full production in August for all models except the 2012 Civic.

"It's going to really take several months for their production to come back to 100% of pre-earthquake volumes," said Toprak. "Probably not before the fourth quarter."

Edmunds.com, a consumer information and market research firm, estimates Americans bought new vehicles at an annual rate of 11.9 million, slightly better than May's 11.8 million annual pace, but down from more than 13 million between February and April.

TrueCar's Toprak said Toyota and Honda spent more on rebates and subsidized financing in June after dealers reported consumers were staying away despite ample supplies of most models.

Consequently, those two automakers likely will regain some, but not all, of the market share they lost in May.

The Detroit Three are expected to hold on to most of the market share they gained in May, but they are spending less on marketing incentives because dealers don't have large inventories on their lots.

Ford spent $2,373 per vehicle on incentives in June, according to TrueCar.com, while Chrysler cut its incentive cost below $3,000 per vehicle ($2,944) for the first time since 2003. Even GM, which spent $3,022, was down more than $750 per vehicle.

In fact, Ford and GM have been increasing prices. Last week, GM said the 2012 Chevrolet Cruze will carry prices that are between $195 and $900 higher than the current models, based on trim levels.