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Tickers in this Article: TM, GM, HMC, F
Sometimes, things just don't work out the way you'd like them too. That's probably the way automakers are feeling right now, in the midst of rough economic times in the U.S., while oil prices remain sky high.

June sales numbers from automakers confirmed the industry's woes. General Motors (NYSE:GM) saw an 18.2% decline in sales. Toyota's (NYSE:TM) sales dropped 21.4%, and Ford's (NYSE:F) sales tumbled 28%.

Americans Pass on Gas
Much of the problem - at least according to manufacturers - is elevated gasoline prices, which coupled with the sluggish economy are creating an environment of lagging consumer confidence. According the Energy Information Administration, the average pump price for June was $4.10 per gallon, the highest ever in the EIA's records dating back to 1993. It's easy to understand how gasoline is a drag on all things automotive. (Feeling overwhelmed by rising oil prices? We off some tips that will save you money, in Getting A Grip On The Cost Of Gas.)

Interestingly, Maserati sales are actually up 15.7% for the year, while Ferrari sales have declined -3.9%. What's up with that?

The worst performers in 2008 are Mitsubishi with sales down 23.4% and Jaguar, with sales off 20.5%. India's TATA must be sweating a little with its recent acquisition of Jaguar, the amazingly luxurious cash eating car.

The two companies with the most outstanding sales this year are Subaru, with sales up 4.5% and Honda (NYSE:HMC) with sales in the black by 4.1%. In June, Honda posted a 1.1% increase in sales

SUVs Have Lost Their Luster
Looking forward, there's plenty to worry about within the auto industry, especially if gas prices capitulate to the upside. At the end of the day, the companies that survive the difficult conditions of 2008 (and 2009, presumably) will likely be those that have already taken dramatic steps toward creating fuel-efficient cars. The proof is Ford's SUV sales, which declined 55% in June, while trucks and vans declined 37.8%.

General Motors reported a sales decline of 8.3%, which caused the stock to rally over 2% on Tuesday, based on the fact that Wall Street had expected a decline of 19%. What we're seeing here is a bit of a paradigm shift in investor mentality. Much like banks over the past few months, the question isn't really will automakers see waning sales; rather, how much, and what are they going to do about it?

The Eve of Auto Adapt
With this in mind, we're truly at a turning point within the auto industry, call it the "eve of auto-adapt". When sales begin to fall through the floor, companies have to dig deep to not only find a way to salvage the upcoming quarters, but also create products that adapt to current business conditions.

It's just common sense that the day of the mega-SUV is over, unless of course an affordable alternative energy model surfaces sometime soon. That's probably not going to happen.

Bottom Line
Over the next few months, investors will likely want to keep a close eye out for new vehicles appearing in automakers portfolios, likely with many fuel-efficient models suddenly finding themselves on the short list for production. Those companies that can fill demand for cost-conscious consumers, both at the pump and on the sticker price, will likely be the clear winners in the years to come.

Before taking the automakers for a test drive, read Analyzing Auto Stocks.

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