Image: Chevrolet's new compact Cruze
Gm  /  Wieck
Chevrolet's new compact Cruze was the best-selling car in the United States in June, new sales data show, cruising past perennial chart-toppers like the Toyota Camry.
Image: Paul A. Eisenstein, contributor
By contributor
updated 7/6/2011 7:59:38 AM ET 2011-07-06T11:59:38

For the first time in years, a U.S. automaker has topped the passenger car sales charts.

Chevrolet's new compact Cruze was the best-selling car in the United States in June, new sales data show, cruising past perennial chart-toppers like the Toyota Camry and Honda Civic.

Chevy’s small car surge reflects parent General Motors’ increasing emphasis on small, fuel-efficient passenger cars. But the Cruze is also benefiting from an ongoing shortage of key Japanese models, including the 2012 update of the Civic.

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GM — like the other domestic automakers — meanwhile, has seen a sharp build-up in inventory of unsold pickups and other trucks in recent months, a development that could produce problems going forward, especially if fuel prices surge again.

“With continued strong consumer demand for GM’s fuel-efficient vehicles, June was another solid month for us,” said Don Johnson, the carmaker’s vice president for U.S. sales operations. “The month caps a successful first half of 2011 for us in the U.S. market — our sales are up and we’ve gained share profitably.”

Chevy’s Cruze, the new compact model GM introduced last year, was not only the best-selling passenger car in the U.S. in June, it was also the third-best seller overall, coming in behind the Ford F-Series and Chevrolet Silverado pickups.

Sales totaled 24,896, about 1,100 more than the bigger Chevy Malibu and well ahead of the Toyota Camry. Normally one of the nation’s top-selling cars, the Camry squeaked into eighth place for June, with sales of 21,375, although the Toyota sedan still leads the passenger car ranks for the year.

Toyota sold 147,469 Camrys in the first six months of 2011, representing a 5 percent year-over-year decline and reflecting the ongoing production shortages plaguing many of the major Japanese carmakers. With 122,972 models sold so far this year, the popular Japanese sedan is still ahead of the diminutive Cruze.

The Honda Civic, meanwhile, fell out of the Top 10 list in June, where it normally ranks close to the Camry. Honda’s top American executive, John Mendel, recently warned that production of the 2012 Civic update won’t be back to normal until “sometime in the fall.”

Japanese makers, working with suppliers hard hit by the March 11 earthquake and tsunami, have been pushing to get their assembly lines rolling as quickly as possible and now expect to be back up and running more quickly than earlier projections.

As a result, “we believe that June likely marked the nadir” for the Japanese downturn, predicted auto analyst Rod Lache, of Deutsche Bank. That could be good news for the industry as a whole, as shortages appear to have played a significant role in the unexpected downturn in U.S. auto sales in May. June’s numbers were up, but still lagged the pace from earlier in 2011.

With Japanese production closer to normal, added Lache, “We expect [seasonally-adjusted sales rates] to accelerate — possibly to above trend levels.”

With more Civics and Toyota Camrys and Corollas now expected to arrive on dealer lots, it’s anyone’s guess as to what the Top 10 list will look like in the months ahead. Data from Experian Auto and other industry sources suggest that the Detroit automakers have “conquested” relatively few Japanese buyers unwilling to wait out the shortages. (Hyundai has done a more effective job of winning over import buyers, analysts say.)

Story: Gas prices hit a sweet spot for US automakers

Nonetheless, Detroit’s “Big Three” automakers are hoping to continue gaining momentum in the small passenger car segments, and there are signs that the domestic carmakers’ newest offerings are connecting with the automotive world’s equivalent of independent voters.

Ford, which continued to lead the June sales charts with its F-Series pickup truck — the nation’s best-selling car for more than a quarter century — also saw three other vehicles land in the month’s Top 10, including the small Ford Escape crossover, at fifth, the ninth-ranked Fusion midsize sedan and, in sixth place, the all-new Focus compact.

The timing of the introduction of the Cruze, Focus and Chrysler’s new 200 sedan is critical, notes automotive industry analyst Aaron Bragman of the consulting firm IHS, since small cars are collectively becoming the fastest-growing segment in the U.S. vehicle market.

It’s a niche Detroit’s carmakers have traditionally avoided because of the relatively low profitability of products like the Cruze and Focus compared with trucks like the F-Series and Silverado.

Domestic carmakers have improved the business case for such models by adopting global designs and production strategies that “dramatically improve economies of scale,” explains Derrick Kuzak, Ford’s global product development czar.

It also helps to have new, lower-cost, higher-productivity labor agreements in place with the United Auto Workers Union.

In 2006, prior to the industry meltdown that drove GM and Chrysler into government-controlled bankruptcies, the all-in labor cost for a typical Big Three worker was around $76 an hour. It’s now closer to $52, according to various industry estimates. And it’s even lower at some plants, such as the suburban Detroit line producing Chevy’s new Sonic minicar. Here, many line workers are getting half the standard pay due to a new two-tier wage program.

U.S. automakers have not abandoned trucks entirely. The June sales numbers underscore a continuing demand. Nonetheless, truck sales are still well short of what they were before gas prices surged to near-record levels. And that means inventories have been rising to uncomfortable levels not seen since before those 2009 bankruptcies.

At the end of June there was a 122-day supply of Chevrolet Silverados and GMC Sierras. The industry generally considers a 60 to 70-day supply normal, although GM now insists it’s comfortable with 100 to 110 days of pickups.

GM’s Johnson and other Detroit officials insist they are trying to match production to demand, rather than trying to force the market to sop up excess production. The concern is that if demand drops further it could force domestic automakers to dole out the sort of budget-busting incentives that got them in trouble prior to the industry downturn.

And that could more than wipe out the profits the manufacturers can eke out on their increasingly popular small cars.

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Explainer: Ten cool car accessories

  • Lance Shows  /  Land Rover
    If you feel like a little weekend camping alongside your trusty Land Rover, the automaker offers this $185 Drifter tent by Mountain Hardware.

    Cars are fundamentally a source of personal transportation. But once drivers are beyond a Model T level of mobility, the selection of a car becomes a reflection of the owner. Because of this, carmakers seek every opportunity to engage in image-building, which helps cement the bond with existing customers and casts a net to gather in new ones who identify with the image being portrayed.

    One way carmakers burnish their image and engage customers is by selling accessories that they think their customers would like, and by licensing the use of their name on products that flatter the carmaker. Browse a company’s web site or the accessories counter at the dealer and you’ll find the typical items; ball caps, polo shirts, pens, key rings and the like.

    But car makers like to differentiate themselves from competitors with branded swag that really stands apart from the rest. We’ve gathered up some of the best examples of that here.

  • Audi


    Audi’s LED-lit, all-wheel-drive-propelled vehicles exude an aura of sophisticated technology, and the company sought to accentuate that with the Duo line of bicycles. The bikes, made by Renovo Hardwood Bicycles to Audi’s specifications, are made using natural, renewable, recyclable and biodegradable wood to construct their lightweight hollow frames. The Duo Road, shown here, lists for $7,460.

  • Bentley


    An ideal accessory marries brands that reflect glory on each other, and that is the case with the marriage of Bentley’s premium English luxury cars and Breitling’s sought-after Swiss watches. Among industry observers, “This is held up as the most successful of the watch and car company collaborations,” noted Lindsay Weaver, director of licensing and branded goods for Bentley, who worked elsewhere until joining the company last year. The most recent product of this collaboration is the Supersports Light Body watch, built to commemorate a 205 mph speed record set by a Bentley Contiental Supersports while drive on the ice of the frozen Baltic Sea.

  • BMW


    Wheeled vehicles like the 328 pedal car are a natural item for carmakers to associate with their car lines, but this one is particularly ingenious because it matches the style of a classic, and difficult to get, model that appeals to adults with pedal car fun for kids. The parent and the child both get to enjoy this pedal car, for different reasons, and at $280 it is accessibly priced.

  • Dodge


    This one pretty much speaks for itself: the classic red rubber playground ball is emblazoned with the company’s name, rendering it a Dodgeball. At $9.95, customers can easily afford to plot an opportunity to drill a hapless opponent with the ball. Meanwhile Dodge, the company that markets Chargers in colors such as “Plum Crazy,” “TorRed,” and “Detonator Yellow,” underscores its reputation for outrageousness that appeals to its customers.

  • Ferrari


    The equation is as simple as this: Ferrari = Formula One racing. The reflexive property is at work here, so it is also true that Formula One = Ferrari. The company began selling its sports cars for the sole purpose of funding the racing program, and it is the only team to have participated continuously since the foundation of the Formula One world championship after World War II. A piston from one of its Formula One race cars cements the connection between Ferrari’s racing and sports cars, giving the company an unassailable and unique connection to the Tifosi, or Ferrari fans. The list price on the company’s web site is 291.67 Euros.

  • Jaguar

    Fotomac  /  Jaguar

    OK, other companies may preach excitement, but how many of them will sell you a company-branded helmet? Jaguar encourages its fans to walk the walk, with this $599 Simpson race helmet. This is the distinctive-looking Super Bandit model, which promises effective venting to help you keep your cool on the track. Unfortunately, there is no available Darth Vader sound effect, so don’t hyperventilate trying to make the sound yourself.

  • Jeep


    Jeep Wranglers rank up there with Labrador retrievers as bait for bringing together young singles. Following the typical outcome of such matches, active outdoorsy young moms want to stay active and maintain their Jeep credibility, even if they are driving something more infant seat-friendly than a Wrangler now. Hence the $260 Jeep-branded jogging stroller.

  • Mercedes-Benz


    Mercedes-Benz, the company that literally invented the automobile, could easily paint itself into the “heritage” corner as some other companies have done. Mercedes products have stayed contemporary and relevant, avoiding the industry’s retro fad of the last decade. But that history is a powerful tool for connecting with customers and differentiating the company from its competitors. A perfect combination of heritage and everyday practicality is this set of wine stoppers, which are styled to resemble the gear shift knobs of the company’s classic models. The set of four features different colors to reflect the type of wine in the bottle.

  • Land Rover

    Lance Shows  /  Land Rover

    Land Rover knows you want to be an adventurous outdoorsman, even if the realities of work and family preclude much actual safari time. But that doesn’t mean you can’t at least get in a little weekend camping alongside your trusty Land Rover, using this $185 Drifter tent by Mountain Hardware. In addition to some of the typical features, this tent has color-coded poles and grommet tabs, with reflective starter points, making set-up a snap for novices, er, rugged outdoorsman, a snap, even in the dark.

  • Porsche


    Jackets and sunglasses may be common car company-wear, but Porsche taps in to its racing heritage by offering these $299 918 Spyder racing-style shoes that should help bring out the wanna-be 24 Hours of Le Mans winner in every Porsche owner or those who aspire to become one. The shoes may not make you a better driver, but surely you will feel like a better driver in them!


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