Nissan Bucks U.S. Slump as Asians Gain Record Share

By Alan Ohnsman and Mike Ramsey

Aug. 2 (Bloomberg) -- Nissan Motor Co.'s U.S. sales gain in July propelled Asia-based automakers to a market-share record as declining demand for fuel-thirsty trucks from U.S.-based competitors pushes the industry toward its worst year since 1993.

Nissan was the only large automaker to boost sales, posting an 8.5 percent gain. Toyota Motor Corp., Asia's biggest carmaker, had a 12 percent drop, and Honda Motor Co.'s sales slid 1.6 percent. Asian brands held 49 percent of the market, as General Motors Corp., Ford Motor Co. and Chrysler LLC's U.S. brands shrank to a record low 42.7 percent, according to Autodata Corp.

``The market realignment -- moving to more cars, away from trucks -- plays to strengths of the Japanese automakers, particularly Honda,'' said Jesse Toprak, director of industry analysis for automotive research firm Edmunds.com in Santa Monica, California. ``Nissan benefited to some extent because Honda was short of inventory for some small-car models.''

U.S. auto sales fell 13 percent, including a 25 percent drop for light trucks, as gasoline prices stayed near $4 gallon amid a weak economy. July's unemployment rate rose to the highest in four years, the Labor Department said yesterday. Second-quarter economic growth, announced July 30, missed the 2.3 percent median projection in a Bloomberg survey.

Sales Drop

GM's sales dropped 26 percent, Ford's fell 15 percent and Chrysler's declined 29 percent. The three U.S.-based automakers rely more on light trucks, which include pickups, sport-utility vehicles and vans, than Asia-based competitors.

The slumping market spread across three continents as GM, Bayerische Motoren Werke AG and Nissan posted quarterly financial results yesterday that trailed analysts' estimates.

GM's $15.5 billion loss was the third worst in the 100-year history of the biggest U.S. automaker. Tokyo-based Nissan's net income plunged 43 percent, while earnings at Munich-based BMW slid by a third.

``A recovery in the North American market looks far off,'' said Yuuki Sakurai, a Tokyo-based general manager at Fukoku Mutual Life Insurance Co., which manages about $54 billion.

Sales for European brands dropped 2 percent, even as Volkswagen AG, BMW and Daimler AG's Mercedes-Benz reported gains, respectively, of 1.5 percent, 2.1 percent and 1.4 percent. European carmakers' market share rose 1 point to 8.3 percent.

Lowest Since 1992

The industry's annualized selling rate for July was 12.6 million vehicles, the lowest since April 1992, according to Autodata.

Toyota, second in U.S. sales this year behind GM, sold 197,424 vehicles, a decline from 224,058. Sales of the Toyota City, Japan-based company's light trucks tumbled 27 percent, including a 42 percent drop for the Tundra large pickup.

The company sold 8 percent fewer Prius gasoline-electric hatchbacks as it strains to meet demand for the fuel-efficient cars. The total decline adjusted for two more sales days than in July 2007 was 19 percent, Toyota said in a statement.

Toyota, which announced July 10 that it's suspending production of Tundras and Sequoia large SUVs through November, will boost supply of Corolla and Yaris small cars by 40,000 units, Bob Carter, vice president of U.S. Toyota brand sales, said in a conference call yesterday.

Toyota's market share was 17.4 percent, up 0.3 point from a year earlier, Autodata said.

Toyota's American depositary receipts fell 97 cents to $85.08 yesterday in New York Stock Exchange composite trading.

Honda

Honda, the only major automaker to expand sales this year, said sales last month fell to 138,744 from 141,048 in July 2007. It sold 22 percent fewer light trucks, with declines of 43 percent each for the Pilot SUV and Ridgeline pickup. Sales of Fit subcompacts jumped 93 percent.

``Honda is very inventory constrained on models like Civic,'' Toprak said in an interview. ``That's likely to be the case in August and September as well.''

Honda's market share rose 1.4 points to 12.2 percent. The Tokyo-based automaker said its total adjusted for sales days declined 9.2 percent.

Honda's ADRs declined 6 cents to $31.93 in New York yesterday.

Nissan, Hyundai

Nissan, Japan's third-largest automaker, sold 95,319 vehicles last month, rising from 87,877, spokesman Fred Standish said in an interview yesterday.

Sales rose 16 percent for Nissan's Sentra small cars and 14 percent for its Versa subcompacts. The automaker increased truck sales 18 percent, helped by the new Rogue crossover SUV and a 24 percent gain for its Frontier small pickup.

Nissan's market share grew 1.7 percent to 8.4 percent.

Hyundai Motor Co., South Korea's largest automaker, sold 40,703 vehicles, down 6.5 percent from a year earlier. Kia Motors Corp., a Hyundai affiliate, increased sales 5 percent to 28,021.

Nissan's American depositary receipts fell 91 cents, or 5.9 percent, to $14.40 yesterday in Nasdaq Stock Market composite trading. Hyundai and Kia shares don't trade on a primary U.S. exchange.

Ford-affiliated Mazda Motor Corp. said sales dropped 13 percent, hurt by lower sales of CX-7 and CX-9 SUVs and the Mazda6 sedan that's being replaced this month.

Fuji Heavy Industries Ltd.'s Subaru reported a 5.4 percent increase. Mitsubishi Motors Corp.'s sales dropped 6.8 percent, while Japan's Suzuki Motor Corp. posted a 2 percent increase from a year ago.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net