Jump to content
Clubplanet Nightlife Community
Sign in to follow this  

Mixed auto sales results in May

Recommended Posts

GM, Honda, Toyota Rise;

Ford, Chrysler, VW Fall



DETROIT -- Major auto makers reported mixed U.S. sales results for May. Sales rose for General Motors Corp. and big Japanese producers Honda Motor Co. and Toyota Motor Corp. But sales fell for Ford Motor Co. and DaimlerChrysler's U.S. brands.

Overall, car and light-truck sales totaled 1,577,026 vehicles last month, up 0.6% from a year earlier, according to Autodata Corp. The May result translates to a seasonally adjusted annual selling rate of 16.1 million vehicles. That trailed April's 16.5 million vehicle sales pace. But it was ahead of May 2002, when vehicle sales slumped to a 15.7 million-unit rate as auto makers temporarily eased up on consumer discounting.

GM reported U.S. sales rose 4.1% to 432,204 vehicles, boosted by strength of its truck lineup. But sales at Ford fell 4.3% to 327,131 vehicles, with big declines in passenger cars, while DaimlerChrysler saw sales fall 3% to 236,578. The percentages are adjusted to reflect an extra selling day in May, compared with a year earlier.

Toyota's U.S. sales rose 6.1% to 186,764 vehicles, driven partly by the strength of new Lexus sport-utility vehicles. Sales at Honda surged 18%, and Nissan Motor Co.'s sales rose 6.1%. These auto makers hammered their big American rivals in taking U.S. market share. Collectively, the three Japanese companies' share grew to 24.6% of the U.S. market in May from 22.4% a year ago. Combined market share of Detroit's Big Three fell to 60.3% from 61.2% a year ago, although GM, with May sales up 4.1%, gained share.

The mixed results came despite stepped up discounting by manufacturers. The biggest discounts came from Detroit's Big Three, but other auto makers are cutting prices to gain share in the weak market. Toyota is offering more generous incentives this month, including deals of 2.9% financing on 60-month loans for the Camry sedan, Corolla small car, Matrix hatchback and the Tacoma pickup, compared with normal financing rates of 6% to 8%. In lieu of the interest-rate deals, Toyota customers could opt for $1,000 cash discounts on the Camry, $750 on the Tacoma, and $600 on the Corolla and Matrix.

In part to adjust for tepid sales, GM and Ford trimmed third-quarter North American production plans, but not by much. GM said it would build 1.225 million cars and trucks, down about 6% from last year's third-quarter. Ford said third quarter North American production will fall by 15% to 810,000 vehicles. But Ford blamed most of the reduction on production slowdowns required to switch three big plants over to making new models, primarily F-150 pickups, the country's top-selling vehicle.

U.S. industry officials tried to put the latest results in the best light. "When you consider all that the economy has been through," said George Pipas, Ford's chief market analyst, "this level of sales is pretty good."

Paul Ballew, GM's executive director for market and industry analysis, said auto makers used dozens of discount offers to spur May sales. GM Tuesday raised cash discounts on some models to $4,000 from $3,000. Still, Mr. Ballew said GM could have a hefty 1.25 million unsold vehicles on North American dealer lots by the end of the third quarter. During a conference call, Mr. Ballew parried questions from analysts about the inventory levels, which could force GM to cut production or pile on even more discounts.

"Our goal is not to build inventory," he said. "We're going to manage this through. We have dealers still willing to take production."

But some GM dealers say they are flooded with inventory and will start to cut back orders if sales don't improve.

Tom Shellworth, a Chevrolet dealer in Vacaville, Calif., said his sales have dropped 30% so far this year. In response, "I'm going to sell what I have right now and cut my orders," he said.

At Volkswagen AG, the largest European exporter to the U.S., sales dropped 16% to 27,941 in May. DaimlerChrysler's Mercedes division said sales increased 2.2% to 19,167. Mercedes was helped by stronger demand for the E-class. German rival Bayerische Motoren Werke AG sales rose 5% to 25,765, boosted mainly by strong sales of its Mini brand. Porsche AG jumped 30% to 3,008, lifted by its first SUV, the Cayenne, which accounted for 46% of U.S. sales in May.

Write to Sholnn Freeman at [email protected]

Updated June 4, 2003 1:49 a.m.

Share this post

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

Sign in to follow this