Chrysler’s U.S. sales up 10%, Ford flat, GM, Japanese brands down
Auto sales fell in May for the first time in eight months as the full impact of the production shocks in Japan created shortages of new cars and trucks.
The market’s retreat after months of double-digit sales gains was exacerbated by high fuel prices, which stoked demand for fuel-efficient small cars — which have been in short supply since Japan was struck by natural disasters March 11.
Most auto executives predicted sales will rebound once inventories are restored, pointing to pent-up demand despite concerns about the recovery.
“Looking at the economy, we continue to think the recovery remains on track, but we see some challenges,” said Don Johnson, vice president for U.S. sales at General Motors Co.
U.S. auto sales fell 3.7 percent to 1.06 million vehicles in May from 1.1 million a year earlier. The lost output resulting from supply disruptions in Japan, estimated at between 100,000 and 150,000 vehicles last month, more than makes up the difference.
“If you take the Japanese out, the seasonally adjusted annualized rate is very close to the April level” of more than 13 million vehicle sales, Johnson said.
Although the selling pace slowed in May to an anemic 11.8 million cars and light trucks, GM and Ford Motor Co. left their full-year sales forecasts unchanged at around 13 million vehicles.
Among the big players, only Chrysler Group LLC and Hyundai Motor Co. reported gains in the monthly sales report, which was skewed by the different number of selling days: 24, down from 26 a year earlier.
GM’s sales slipped 1 percent, and Ford’s edged down 0.3 percent. Toyota Motor Corp.’s sales plunged 33.4 percent, placing Japan’s biggest automaker in fourth place in the U.S. market behind Chrysler. The Auburn Hills automaker’s sales were up 10.1 percent.
Toyota and Honda, fixtures in the list of the top 10 selling autos, dropped out altogether in May. The only Asian models in the list were the Nissan Altima and Hyundai Sonata.
Hyundai’s sales surged 20.7 percent, while Volkswagen AG reported a 24 percent rise in May, when it marked its return to the United States as a local manufacturer with the opening of a plant in Chattanooga, Tenn.
Overall, the European brands performed strongly in May, increasing sales 22.7 percent and boosting their combined market share to 9.9 percent, up 2.1 points.
With gas prices off their peaks but still high, European carmakers are benefiting from their diesel and other fuel-saving technologies. Jonathan Browning, chief executive of Volkswagen Group of America, said he didn’t expect the price of gas to subside much in the near term, “and in the long term, it’ll continue to increase.”
High gas prices weighed on demand for big pickups. Their sales fell 12.7 percent in May.
But of all the factors contributing to May’s results, gas prices were the least important, said Jeff Schuster, a forecaster at J.D. Power and Associates. “The story in May is the incentive pullback as well as the real and perceived vehicle shortages.”
Automakers have scaled back on profit-eroding incentives in recent months. Compared with last May, incentives are down more than $500 on average to $2,303 per vehicle, according to Autodata Corp.
Sales executives said consumers seemed concerned that they wouldn’t get good deals because of the shortages of vehicles. “Early in the month, consumers sat on their hands,” Johnson said.
With few vehicles to sell in May, Toyota lowered its discounts to $1,408 per vehicle. “We dialed back in our marketing in all forms,” said Bob Carter, general manager of the Toyota brand division at Toyota Motor Sales USA.
But with production in Japan now picking up, Toyota announced deals Wednesday for both Lexus and Toyota-brand vehicles in June, including zero interest for 60 months on the Toyota Camry midsize sedan.
The deals apply both to vehicles in stock and models on order. “We want to retain loyal customers who may not be able to get exactly what they want,” said Mark Templin, general manager of the Lexus division in North America.
According to a J.P. Morgan study, Japanese vehicle production bottomed in April, with domestic output down 60 percent at less than 300,000 vehicles.
But Japanese automakers say they now expect to restore output faster than they first predicted when they said it might take until the end of the year.
Over the next couple of months, the U.S. selling pace might stay below 13 million vehicles, on an annualized basis, GM’s Johnson said. “But once inventory starts to build, that’s when we’ll get back above 13 million.”
http://www.detnews.com
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