Honda, Hyundai Avoid Slump as Asians Top U.S. Brands

By Alan Ohnsman and Greg Bensinger

July 2 (Bloomberg) -- Honda Motor Co. and Hyundai Motor Corp. increased June U.S. sales amid an industry decline, leading Asia-based automakers to outsell the domestic brands of General Motors Corp., Ford Motor Co. and Chrysler LLC.

Demand for fuel-efficient cars boosted sales for Honda and Seoul-based Hyundai about 1 percent each from a year earlier while the U.S. total fell 18 percent. GM, Ford and Chrysler sales declined a combined 26 percent, while those of Japanese and South Korean automakers slid 12 percent. Toyota Motor Corp., the biggest Asian automaker, reported a 21 percent drop.

With gasoline prices averaging more than $4 a gallon, June sales reflected the shift in buyer preferences toward smaller vehicles. GM, Ford and Chrysler get more than half of their sales from pickups, sport-utility vehicles and vans, which are larger and less fuel-efficient.

``Small cars like Honda's Civic will remain popular,'' said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments Ltd. in Tokyo. ``With these gasoline prices, U.S. consumers will definitely go for cars with better fuel economy.''

Similarly, sales of new cars, trucks and buses in Japan dropped 3.6 percent to 281,261 in June, the Japan Automobile Dealers Association said yesterday in Tokyo.

Consumer Confidence

Fuel prices, the housing slump and weakest economic growth in five years pushed June's annualized sales rate to the lowest in any month since 1993.

``There are things weighing on the consumer conscience that we haven't seen since the oil embargo of 1973,'' Jim Lentz, president of Toyota's U.S. sales unit, said on a conference call yesterday. ``Fuel prices are going to be the trigger that gets things started again.''

The Asia-based companies for the second time in as many months overtook the U.S. makers, with 46.2 percent of new- vehicle sales, compared with 45.8 percent for GM, Ford and Chrysler.

Toyota sold 193,234 cars and light trucks last month, a drop from 245,739 a year earlier. The company's 21 percent decrease was its biggest in the U.S. since October 2002.

Sales of the company's Prius hybrid plunged 34 percent as supplies of the car ran short. Toyota's Corolla small car and midsize Camry again outsold Ford's F-Series trucks, the perennial top-selling U.S. vehicle. Toyota's Tundra large pickup dropped 53 percent.

Limited supplies of batteries and other parts still restrain availability of Prius and other hybrid models, Lentz said. Toyota has only about a one-day inventory of the Prius, he said.

The Toyota City, Japan-based company declined 0.2 percent to 5,000 yen as of 9:49 a.m. on the Tokyo Stock Exchange.

Honda, Nissan

Honda, the second-largest Japanese automaker, sold 142,539 cars and light trucks in the U.S. last month, an increase of 1.1 percent. Honda for a second consecutive month outsold Chrysler to rank fourth in U.S. sales volume. It trails Auburn Hills, Michigan-based Chrysler by just 69,468 units in the first half.

Sales almost doubled for Honda's Fit small car, rose 37 percent for the Accord and increased 9.5 percent for the Civic, the Tokyo-based company said.

`Perfect Mix'

``Honda is benefiting from a perfect mix of circumstances and production mix,'' said Rebecca Lindland, an analyst at forecaster Global Insight Inc. in Lexington, Massachusetts.

Honda's market share rose 2.3 percentage points to 12 percent.

Nissan, Japan's third-biggest automaker, sold 75,847 Nissan and Infiniti brand vehicles in June, declining 18 percent from a year earlier. Trucks led the drop, including a 71 percent decrease for the Titan large pickup and a 72 percent slide for the Pathfinder SUV.

Honda declined 1.7 percent to 3,580 yen and Nissan fell 1 percent to 858 yen.

Hyundai sold 50,033 vehicles in June, a 1.3 percent increase from a year earlier. The gain came from Accent and Elantra small cars and midsize Sonata sedans, its most fuel- efficient models, the Seoul-based automaker said in a statement.

Similarly, Hyundai affiliate Kia Motors Corp. posted a 7.6 percent sales increase last month to 28,292 vehicles. Gains came from Optima sedans and Rio and Spectra small cars, the company said in a statement.

Mazda Motor Corp., one third owned by Ford, said its sales declined 7.7 percent to 23,771. Subaru, Fuji Heavy Industries Ltd.'s auto brand, reported a 5.3 percent sales gain on higher demand for its new Forester small sport-utility vehicle.

Among smaller brands, Japan's Mitsubishi Motors Corp. reported a 42.4 percent decline and Suzuki Motor Corp. said its sales fell 5.2 percent.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net;