There's no way to sugarcoat it: Ford's June sales sucked. Ford dealers moved 28 percent less metal– 167K vehicles– than last June. Compared with the first half of 2007, FoMoCo's sales fell a full 14 percent. In all fairness, the numbers are the first which don't include Jaguar and Land Rover (sold off to Tata motors). But based on recent months' sales, the two brands would have only added about another 4k sales. So it still sucks. Retail sales for cars were up three percent; cars and crossovers made up 59 percent of retail sales for the first half of the year. Fleet sales were down 11 percent for June. Ford mouthpiece Jim Farley explained "the rapid rise in gasoline prices, and the resulting shift toward fuel efficient vehicles, has been challenging." But fear not! "In addition to adjusting our capacity and production plans to produce more cars and crossovers, we are introducing several new vehicles with class-leading fuel economy." Hope springs eternal, but will it be this spring?

Click here for full Ford Press Release 

Volkswagen is amongst the first of the manufacturers sending out its SOS June sales numbers. Despite the numbers and the claim that they're enjoying the "best sales month since August 2006," the picture at VW is grim. if not for the new Tiguan, they'd be cratering with the best (worst?) of them. VeeDub's compact SUV-crossover-thingy sold 1044 units in June. Can the Golf-on-stilts keep-up the big Mo for the rest of the year? Equally worrying, has the Tiguan cannibalized sales of the Jetta and Rabbit, which were both down from last month? That's what should send Volkswagen of America boss Adrian Hallmark running for the Immodium. While a 1500 unit hit doesn't sound a lot, the percentages– Jetta down 11.3%, Rabbit down 18.9%– are straight-up scary. The explanation: unimpressive gas mileage from standard five-cylinder engines. Hello? Volkswagen has fleets of cars in Europe (under three different nameplates) that are all fuel efficient, fun to drive, and don't feel cheap. And none of them was designed or prepared for sale in the United States. A VW lineup including the Fox, Polo, Skoda Fabia or Roomster would be kicking ass in today's gas conscious U.S. market. The new U.S. diesel Jetta is great, but pricey (both to buy and run). Screwing itself, VW is.

This website has railed against automobile manufacturers' insidious influence on editorial content: casual pro-GM remarks made by Rush Limbaugh and Sean Hannity, publications and websites that don't fully reveal sponsored junkets, buff book car reviews that pull their punches to appease advertisers and TV programs built around automotive product placement. [In the latter case, the new Knight Rider is the most egregious example– a program so laced with Ford product placement it was hard to tell where the show started and the commercials began.] Advertising Age reports that the Federal Communications Commission's chairman is sending a torpedo towards the entire product placement business. "There is growing concern that our sponsorship identification rules may fall short of their ultimate goal: to ensure that the public is able to identify both the commercial nature of programming as well as its source," FCC Chairman Kevin J. Martin said. Kev's contemplating new requirements for longer and bigger disclosure of product placement– up to four seconds. Does the ad industry like this? Uh, no. ""I really don't think product placement is sinister or fooling anybody. It's just part of life," insists Dan Jaffe, an exec VP at the Association of National Advertisers. "A crawl or bubble would be totally disruptive of what is going on in the program itself." So much for engaging content, then. 

Is anyone surprised? Automotive News [sub] reports that GM is extending the 0% financing for everyone deal through July 7. The conditions are the same: 0 percent financing on most vehicles if you're able to make it through a dealership's door under your own power. Dealers who have increased floor traffic are happy because they're even selling SUVs and full-sized pickups. GM spokesman Pete Ternes said they'll "heavily advertise and promote the sale, especially over the July 4th weekend." With the problems GMAC is already having, giving away money for the next six years can't help their situation. And practically giving away the inventory can't be making GM much money, either. Hole. Digging. Stop. Meanwhile, GMAC is launching a "rate incentive program" on select GM Certified Used Vehicles, including the Chevrolet Impala and Malibu, but especially SUVs. "Well-qualified customers also can receive GMAC 4.9% APR financing for terms up to 60 months on 2003-2008 models of Chevrolet Trailblazer, Tahoe and Suburban; GMC Envoy, Yukon and Yukon XL; Pontiac G6; and Buick Lacrosse vehicles at participating GM Certified Used Vehicles dealers." Yeah, that'll work. 

As we mentioned previously, the U.S. vehicle market is about to be hit with a tsunami of off-lease SUVs. BusinessFleet is putting numbers to the news, courtesy of CNW Research's latest Retail Automotive Summary. They estimate 800k SUVs will come off lease this year, with a similar number expected next year. What makes those numbers so horrifying: residuals previously figured at 51 percent of original capitalized cost are now closer to 34 percent– assuming no further drop in value. CNW president Art Spinella estimates "that difference translates into more than $6,100 per unit in missed residual values or $4.88 billion." He estimates next year's figure could be as high as $4.74b. That's a lot of money for someone to absorb. SUV buyers note: even without GM zero percent offers on slow-selling trucks and SUVs (i.e. all of them), this is The Mother of All Truck Buyer's markets. And you've got plenty of time to shop.

Like many organizations in these gas-conscious times, Kelley Blue Book (KBB) and the LA Times (LAT) are fascinated by the negative effects of high gas prices on consumer spending. So KBB did a study and the LAT reported it. The two giants in intellectual research found that, in short, $4 to $5 gas has forced people to spend less money on other shit [paraphrasing]. For example, people aren't going to the movies as much, now that they are spending more on gas. [Do you know what a movie theater looks like? Click over to the LA Times, and you can not only read "less money on movies" but see a picture of a real line at a real American movie theater.] Other things people aren't buying as much of: expensive coffee, vacations, clothing, restaurants, carwashes, DVDs and high-quality marijuana. OK, I added that last one. But how do we know that the rising costs of other consumables– most notably food– don't account for the cutbacks?

Dear Employees,

The auto industry is going through a period of unprecedented change. A dramatic U.S. economic slowdown and auto industry contraction leaves Chrysler — like other automakers — to face difficult issues and decisions.

Our worldwide sales are down 14 percent, year to date — even considering increases in Canada, Mexico and international markets.

Ah, to be the head of a "managed" economy! Let's say you want to clean-up Bejing's foul air for the Olympics, so athletes don't retch, collapse and die of asphyxiation in front of billions of international onlookers. Simple. First, ban 300k cars in a single stroke. Sorry, your car is illegal. Drive it between now and September 1 and we'll confiscate your car and throw your ass in jail. "The next stage," ABC News reports. "Will be for all private cars to be banned on alternate days using an 'odds and evens' number plate system. This will start on July 20 and is expected to take 45 per cent of cars off the streets." That's 45 percent of the 50 percent of Beijing traffic that remains after the first ban. Next? "Factory closures and a halt to major construction will also occur during the same period." Anything else? Raise gas prices. "State-owned oil companies, now subsidizing fuel prices, have been losing hundreds of million of dollars," The Detroit News reports. "Today, Chinese drivers pay $2.85 for a gallon of gas versus $4 in the U.S." Tomorrow, more. China's leaders will work on kicking-out foreign automakers eventually. But that's enough for today, yes?

We're getting reports from the front line that GM's 72-hour sale is a success– of sorts. One dealer reports that business was so brisk that both the Dealer World system (used to verify codes. locates, ordering, and more) and GMAC's computer comms crashed. "The F&I guys had to use the fax, then phone and stay on hold for an hour." Popular models are… gone. "Try and find a Cobelt or HHR at the ZERO for 72. Can't be done." Another dealer reported that he'd sold 15 additional units during the sale, a number he called "substantial." Which is, of course, a relative term. IF this plays out across the country, GM's Black Hole Tuesday numbers will be bad, but they won't be as bad as analysts' predictions. The downside: the prices– hence profits– are scary low. Loaded 1/2 ton pickups are walking out the door for $200 per month. And GMAC is ignoring the "when you're in a hole stop digging" maxim; offering low credit score buyers up to 150 percent loans (to get them out of their backwardsness). Worst of all, July and August. Despite the hit to the bottom line, and the long-term damage to GM's pricing, metal is being moved. Short-term thinking GM may extend the sale. The question is, can it afford to?

While we wait for automaker bankruptcy filings, we have a little schadenfreude from a different (but equally deserving) sector to keep you going. Reuters reports that spiraling foodstock costs are tearing a giant hole in profit margins for domestic ethanol suppliers, causing a spate of bankruptcy filings. Corn (the main ingredient for domestically-produced ethanol) was already hitting record prices before the recent deluge in the Midwest. Post-flooding price spikes have wrought havoc on the whole ethanol business plan. Alex Moglia of Moglia Advisors, a biofuel consultancy group, tells Reuters that 12 biodiesel and ethanol plants have declared bankruptcy in recent months, with more to follow. The plants that are still open are typically producing at about half capacity, says Moglia. Ironically, a major problem for domestic ethanol producers is the transportation of their fuel. The majority of ethanol refineries are in the Midwest, which has a massive oversupply of corn juice. High fuel costs are preventing America's alternative fuel from reaching larger markets on either coast at competitive prices. Ultimately, the big boys of ethanol– your ADMs, and VersaSuns– will survive the hard times for ethanol producers, thanks to agribusiness diversification. It's the little guys that are being forced out of business, as reality begins to hit home for America's "magic fuel." Even so, their elected officials are probably lobbying for bailouts as we speak. 

Programs to buy back beaters have been implemented in California and Texas, pulling thousands of polluting vehicles of the road each year. Canada's program to buy back old, polluting cars is set to roll out in January of next year. The Detroit News reports that the three-year Canadian program is targeting 50k buybacks, or about one percent of all cars on the road. While provincial governments have implemented similar programs, this will be North America's first nationwide buyback program. The $92m program will offer drivers $300 per running beater, or discounts on bicycle purchases or a public transit pass. Busting-out the old calculator, it becomes obvious that buying 50k cars at $300 a pop would set back the Canucks $15m. Some $77m of the program will be going… somewhere else. But don't expect opposition to the program. The Alliance of Automobile Manufacturers spokesman Charles Territo says "we strongly support efforts to get older, less-efficient vehicles off the roads and help consumers." Because they'd rather you buy new than drive your clunker till it breaks, of course. Which means the only people who won't be thrilled by this program are people who care how their government spends money… and know how to use a calculator. 

The bad news for The D2.8 and workers just keeps coming. The AP reports [via Yahoo! Business] that Chrysler will shutter their St. Louis Southminivan factory indefinitely. ChryCo will also reduce its St. Louis North pickup truck production facility from two shifts to one. Chrysler President Tom LaSorda used the plant close announcement as an opportunity to deny rumors that Chrysler's going Tango Uniform, heading for the boneyard. "Hogwash," LaSorda euphemized (euthanized?). "Absolutely not being considered at all." Not at Chrysler, and not at the press conference. "Absolutely no relevance. I don't even want to entertain those questions." The idea that the Cerberus Brain Trust hasn't even thought about a MTLSAS (man the lifeboats strip and flip) simply sounds silly. When the dust settles, LaSorda will be sitting fat and happy in a well-funded retirement villa, while tens of thousands of blue and white collar employees wonder what hit them.   

Last year, France introduced a system known as "bonus-malus." Under the scheme, people who buy gas guzzlers have to pay a €200 – €2600 penalty. Consumers option for something more "environmentally friendly" get a €200 – €1,000 bonus. Automotive News [sub] reports Environment Minister Jean-Louis Borloo plans to "amplify" the program. Car buyers who purchase "extremely polluting" vehicles will soon pay an additional annual fee. As in carbon tax. Borloo didn't say when he plans to start the extortion new program. But here's the best part: "Borloo has said in the past that the system of penalties and rewards applied to vehicles could be extended to other products such as electronic goods." Liberté, Egalité, Fraternité!

Autobloggreen (ABG) is all over Mercedes' EV plans. The tree-hugging bloggers report that Stuttgart's first EV will be an A Class. Digging deeper, it seems that Mercedes will be using a battery pack from Tesla Motors, confirming Elon Musk's hint of a "small deal" with Daimler. The rumor hasn't been confirmed by Mercedes, and ABG points out that Daimler claims to already have li-ion battery thermal issues licked. Furthermore, Continental has been named as the official battery supplier of Mercedes' forthcoming S 400 Hybrid. So we'll wait to hear from official Daimler sources before we credit Tesla with its first supplier contract. And don't even ask when the EV A Class will hit the market. Automobile Woche is prognosticating an industry-standard 2010 release. Battery supply notwithstanding, the A-Class was designed with a "sandwich floor" that can accommodate either fuel-cell or EV conversion. Which means that they're good to go. Or not.