Higher fuel prices took a bite out of truck sales for the DCC, Ford, and GM, as they gave up more market share.
Dale Jewett - Automotive News - June 1, 2006
2006 Toyota Corolla - May sales up 28%
DETROIT - The Toyota juggernaut kept rolling on in May, fueled by higher gasoline prices and new models. That same combination is clicking for rival Honda.
But it’s not clicking for General Motors, Ford Motor Co. and the Chrysler group, which posted lower U.S. sales for the month compared with May 2005 because of drops in sales of SUVs and pickups.
With all automakers reporting, U.S. sales in May were down 0.7 percent to 1,489,922 units. For the year to date, sales were down 0.4 percent to 6,874,473 units.
Toyota Motor Sales U.S.A. Inc. said its U.S. sales in May set a monthly record and finished above 200,000 units for the third month in a row. It was also the second month in a row that the Japanese automaker has sold more vehicles in this country than DaimlerChrysler.
Driving the gain were a 28 percent jump in Toyota Corolla sales during the month and 8,000 sales of the just-launched Yaris small car. Toyota Camry sales grew 3.6 percent in the month, but sales of almost all Toyota Motor Sales’ trucks fell.
American Honda Motor Co. also said its U.S. sales in May set a monthly record, up 16.1 percent to 141,810 units. Contributing to the growth were a 29 percent gain in Honda Civic sales for the month and 5,248 sales of the Fit small car. In less than two months on the U.S. market, Fit sales have totaled 9,040 units.
Two other automakers - Volkswagen of America and Suzuki - posted significant gains in May.
Volkswagen’s U.S. sales, which include the Audi and Bentley brands, rose 28.5 percent to 29,652 units. American Suzuki Motor Co.’s sales rose 35.9 percent to 10,135 units.
But higher fuel prices took a bite out of truck sales for the Chrysler group, Ford Motor Co. and General Motors, as they gave up more market share.
The declines prompted production cuts at GM and Ford.
Ford Motor Co.’s U.S. sales fell 2.0 percent in May to 277,174 units. Through five months of this year, the automaker’s sales are down 3.5 percent to 1,274,961 units. Sales of Ford’s market-leading F-series pickups fell nearly 6 percent in May.
“The overall industry in May was dampened by rising fuel prices and interest rates," said Mark LaNeve, GM’s North American chief of sales and marketing, in a statement.
GM saw sales of both cars and trucks decline as it held back on consumer incentives and curbed unprofitable sales to rental car companies.
The U.S. automakers, which have relied on light trucks and large cars to generate profits, have been hit by consumers looking to downsize to smaller and mid-sized cars, a segment dominated by the Japanese automakers.
GM and Ford, both struggling to slash costs and payrolls, pointed to sales gains for most of their new models.
Ford Motor's May U.S. sales decline was more limited than most analysts' estimates because of increased demand for the automaker's new models, including the popular Ford Mustang and Fusion.
GM said sales of its new models - including the Chevrolet Tahoe, Impala, HHR and Cobalt -- accounted for almost a quarter of its total sales in May.
PRODUCTION TARGET CUTS
Paul Ballew, GM's chief sales analyst, estimated that sales for the U.S. auto industry overall had weakened to a seasonally adjusted annual rate of 16.1 million units in May, down from 16.7 million last month and 17.7 million last year.
Following the drop in sales, GM and Ford set third-quarter production targets that were lower than year-ago levels.
GM said it would build 1.05 million vehicles next quarter, down 8.4 percent from the same quarter last year. Ford Motor plans to build 710,000 vehicles in the July-September period, down 2.5 percent. Ford's production cuts were all in the truck segment.
Production levels are a closely watched barometer because U.S automakers book profits on vehicles when they are shipped from assembly plants, not when they are sold at dealer lots.
In a bid to boost sales, Ford division began offering 0 percent financing on almost all of its vehicles and giving buyers $1,000 toward gasoline purchases. It is one of Ford's most aggressive incentive programs since the industry began relying heavily on such discounting in 2001.
Ford's offer to subsidize gasoline purchases for car buyers upped the ante for Chrysler and GM, which offered a similar but more limited program earlier this month in Florida and California.
"We're assessing it. We're looking at it," GM's Ballew said. "Nothing tells us we have to follow them lock step."