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U.S. Automakers Experience Major Mid-Year Slump

07/02/2008
In what some industry analysts are calling "astounding," overall sales for U.S. automobile manufacturers dropped by 18 percent in June as measured against the same month in 2007. All major automakers except Honda Motor Company, Hyundai Motor Corporation, and Volkswagen of America reported steep declines, with Chrysler dropping 36 percent, Ford Motor Company off 28 percent, Toyota Motor Corporation dropping 21 percent, and General Motors down 18 percent. Honda and Hyundai each recorded a one percent increase from a year earlier, with Volkswagen reporting a 0.3 percent increase. Industry analysts blame the sharp declines on the price of gasoline and the overall soft economy. Across the board, companies report lack of demand for light trucks and SUV, along with an inability to met the demand for smaller, fuel-efficient cars. The Associated Press reports that Toyota did not have enough stock of its Prius, Corolla, or Yaris models to meet demand and that Prius sales were hurt by a battery shortage. AP also says that while Ford and General Motors have announced plans for new subcompact cars, it will take at least two years to retrofit factories and retrain workers. "There is still uncertainty in the marketplace, and we have no reason to believe gas prices will decrease in the short term," says Jesse Toprak, executive director of industry analysis for Edmunds.com, in predicting continued decreases for the remainder of the year.

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