Wednesday, Aug. 3, 2005 | 9:20 a.m.
DETROIT -- By extending employee pricing through Labor Day, U.S. automakers hope August will be as prosperous as July, when the discounts helped them achieve near-record sales. But they acknowledge their luck could run out as discounted vehicles are sold off and new models with fewer incentives hit showrooms.
"When the employee-discount plans are removed, there will be a lull. Things tend to even out. Exactly how that's going to progress, I don't know," said George Pipas, Ford's U.S. sales analysis manager.
The mood in Detroit was euphoric Tuesday as the industry reported a seasonally adjusted annual sales rate of 20.8 million units for July, the highest since a record 21.8 million rate in October 2001, according to research firm Autodata Corp.
That was the month after the 2001 terrorist attacks, when GM introduced zero-percent financing to spur the industry and U.S. economy.
All three of Detroit's automakers have said they'll extend the discount offers that lets customers buy 2005 vehicles at the employee rate.
Largely because of the promotion, GM, Ford and Chrysler saw their combined results climb 26.5 percent in July. Car sales rose modestly, up 4.2 percent, but truck demand shot up 36.7 percent.
The bevy of deals also helped foreign automakers attract customers. Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. all said July was their best-ever U.S. sales month, even though they didn't offer similar discounts. BMW and Mercedes-Benz, two of the major European players, set sales records in July as well, as did South Korea's Kia Motors Corp.
Of the Big Three, Ford, the nation's No. 2 automaker behind GM, had the biggest month-over-month increase -- 35.5 percent over last July. Sales of Ford, Lincoln and Mercury trucks gained 38 percent, while car sales rose 26.7 percent. The discount gave a lift to what had been a lackluster year for Ford, whose overall sales increased just 1.7 percent in the first seven months of the year versus a year ago.
Ford said its F-series trucks set a record for the highest monthly sales of any vehicle since the 1920s. F-series sales were up 58 percent in July and 4 percent for the January-July period.
"I actually saw people smiling this month," Pipas said.
Chrysler said July results were the highest monthly sales in its history. Chrysler's business jumped 32 percent over last July, spurred by a 38.6 percent increase in truck sales, including record-setting sales of the Dodge Ram pickup. Chrysler's overall sales were up 8.9 percent for the first seven months of the year.
GM, the world's largest automaker, said its sales were up 19 percent over last July. That was less dramatic than the 41 percent increase in June, when GM was the first automaker to introduce an employee-pricing deal, but the company said it was pleased with the results. Paul Ballew, GM's executive director of global market and industry analysis, said it was the best July for GM since 1979.
GM's truck sales rose 34 percent in July while car demand was off 4.6 percent. Overall, GM's sales were up 5 percent for the first seven months of the year, boosted largely by June and July volume.
Sales percentages are adjusted for differences in the number of selling days. There were 26 selling days in July 2005 and 27 in July 2004.
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