Originally created 08/05/98

GM strike helps boost auto sales of competitors in July



DETROIT -- Chrysler, Honda and Toyota posted U.S. sales gains in July, thanks in part to two strikes that all but halted North American production at rival General Motors Corp.

Chrysler Corp. said Monday that its sales increased 3 percent compared with July 1997, when its sales were down. It surpassed 200,000 units for the sixth consecutive month -- a surprise after an unusually strong May and June.

"The fact that we were able to crack the 200,000 barrier again in July speaks to the strength of the market," said M. John MacDonald, Chrysler's vice president of sales and service.

Chrysler's popular array of sport utility vehicles and its Ram pickup once again helped push its sales ahead. Sales of its four Jeep and Dodge sport utility vehicles were up 35 percent from a year and set a company record.

Overall truck sales were up nearly 9 percent, for a July record. Chrysler's car sales were down 8 percent, but analyst Joe Phillippi of Lehman Brothers said that was due to lower sales to business and government fleets. Fleet sales are less profitable than retail sales.

"Their retail numbers were really good," Phillippi said. "That's surprising, given the incentive wars were largely over."

Though automakers continued to offer rebates and other incentives to clear out 1998 models, the big "owner loyalty" coupons that the Big Three automakers promoted in the spring expired in early July.

Chrysler, Honda and Toyota were the first major automakers to report July sales. Ford Motor Co. was scheduled to report its figures Tuesday, followed by GM on Wednesday.

GM dealers reported declining showroom traffic because of two strikes in Flint, Mich. GM saw stocks of its most popular models become scarce in July as the No. 1 automaker's production slowed to a trickle. The strikes ended last week.

Honda Motor Co. reported its U.S. sales increased nearly 6 percent to set a July record of 92,820 vehicles. Honda's truck sales also set a record for any month, up nearly 44 percent from a year ago on strong sales of the CR-V, a compact sport utility vehicle. Honda's car sales were flat.

Toyota Motor Corp. said its sales were up 12.5 percent last month, on strong sales of its Land Cruiser sport utility vehicle, its Sienna minivan and Tacoma compact pickup. Total truck sales were up 22 percent, while car sales rose 8 percent.

Among smaller foreign automakers that reported U.S. sales Monday, Subaru, Saab and Mercedes-Benz posted double-digit gains. Volvo said its sales were down 17 percent and Mitsubishi reported an 8 percent decline.