http://news.yahoo.com/s/afp/20060601...e_060601230827

DETROIT, United States (AFP) - The Big Three US automakers' reliance on trucks and sport utility vehicles (SUVs) to drive profits hit another pothole in May as consumers switched to more fuel-efficient passenger cars and cross-utility vehicles.

Asian automakers -- which offer a wider range of more fuel-efficient vehicles -- continued to post sales and market share gains, now accounting for 40.2 percent of the massive US market, up from 36.3 percent a year ago, according to Autodata.

The Big Three's market share fell to just 52.9 percent in May from 57.6 percent a year ago.

The shift towards more cars and car-based utility vehicles will likely have a significant effect on profitability, said David Healy, analyst with Burnham Securities.

"We have seen the mid-size sport utility market collapse and I don't think that is going to change," Healy told AFP. "This is liable to have a big impact on profits because... the margins on the car side are much smaller."

Healy said he expects demand for full-size pickups to remain relatively healthy, since few alternatives offer their flexibility.

Ford Motor Co. took the offensive Thursday by offering vehicle buyers a 1,000-dollar gift card for gasoline (petrol) for a year along with zero percent financing.

Ford's incentive follows a gasoline "price-cap" deal rival General Motors Corp. offered some customers in Florida and California that gave new car buyers pre-paid gasoline cards that compensate them when pump prices exceeded 1.99 dollars per gallon.

That deal did little to boost GM sales, however.

GM posted Thursday a 16 percent decline in demand in May from a year ago, ending at 345,157 units. Passenger car demand was lower by 19 percent at 129,905 units, while truck sales were off by 13 percent to 215,252 units.

"This was a challenging month for us," Paul Ballew, GM's director of global market and industry analysis, told reporters on a conference call.

He said demand for some traditional truck-based SUVs, particularly the Chevrolet Trailblazer and GMC Envoy, were running at nearly half the pace of a year ago.

The story was similar at Ford, where sales were off 1.9 percent from May 2005 at 278,546, after strong car sales were unable to offset a steep drop in demand for trucks and SUVs.

Truck sales fell 6.6 percent to 170,298 units while passenger car sales climbed 6.4 percent to 108,248.

George Pipas, manager of US sales analysis at Ford, said buyers of the automaker's new sedan family were opting for more fuel-efficient four-cylinder models during the month, as more than 55 percent of the cars were sold, up nearly 10 percent from April.

German-US group DaimlerChrysler said its US sales fell eight percent in May to 212,882 units after at 14 percent drop in sales at the group's US-based Chrysler offset a 21 percent increase in sales at the Mercedes group.

Gary Dilts, group vice president of sales at the Chrysler Group, said the drop off in truck and SUV sales "stunned" the segment, but he expects to see things level out in the near future.

"Those segments are going to be there but they will remain under pressure," he said.

Meanwhile, most Japanese automakers posted robust US sales rises.

Toyota Motor Sales USA Inc. reported overall best-ever monthly sales of 235,708 vehicles, an increase of 12.3 percent over May 2005. Year-to-date sales rose 8.8 percent to 1,000,524.

"The pinch at the pump has made small cars part of the big picture, right along with hybrids," Jim Lentz, TMS group vice president and Toyota division general manager, said in a statement.

Honda Motor America posted an 11.4 percent increase in monthly sales at 141,810 vehicles, underpinned by the passenger car segment. Year-to-date sales were up 8.6 percent to 614,778 vehicles.

Nissan North America, Inc. bucked the trend with sales down 11 percent to 86,667 units in May on weakness in the Infiniti division.

 

GM's "you won't pay more that a $1.99 for a gallon of gas for your first year" is being heavily advertised in socal.

 

gimmicks and parlar tricks are no substitution for a solid automobile that is cheap to drive.

 

Good. Maybe high gases will get the automakers to look more towards fuel efficiency than 4500 lb SUVs.

I think high gas prices are the best thing to happen to americans. maybe we will realize that public transportation needs improved and an alternative to gas is needed.

 

^^^^ tru, but so many people are gonna be coming out of a negitive equity situation it could adversly affect our economy, im not sayin like another depresion but could be noticable

 

rich ppl don't care about gas prices and mpg

good thing us poor folks do!!!

 

just wait about a year until the innumerable creative mortgages that people bought hit their balloon payments/etc., and the interest rate precludes an affordable refi. gonna definitely be noticeable.

 

^^^^
Non-sequitur, anyone?

Gas prices are high, and since the price of apples from Nicarauga is going up because of the immigration reform, we'll all be going into debt for apples!!!

 

actually, they have alternative stuff they can use now and the technology is there, but can you imagine what that would do to the economy? How many people do you think depend on money (jobs) from oil? Just think, gas stations, truckers, oil rigs, the companies that supply parts for all of these, etc, it would be chaos. And the hybrids are just so everything won't fall apart for now.