U.S. Auto Sales Off, but Most Imports Gain
The supercharged U.S. auto market finally showed signs of throttling down, as sales of new cars and trucks fell 2% in May, posting their first year-over-year decline since August 1998.
Two of the Detroit-based Big 3 were responsible for the retreat, as unit sales dropped 5.9% in May for No. 1 auto maker General Motors Corp. and 17.7% for the Chrysler brand of No. 3 DaimlerChrysler, according to figures released Thursday. Ford Motor Co., aided by its new Focus cars and Explorer Sport Trac sport-utility vehicle, held steady with a slight 1.4% increase.
At the same time, almost every importer gained in May, led by Toyota Motor Corp., which posted a 2.7% increase for its best month ever; its Japanese rivals Honda Motor Co. (3.6%) and Nissan Motor Co. (11.5%); and Volkswagen of Germany (9.5%).
In all, the domestic brands saw their market share drop to 67.5% from 70.4% a year earlier. Asian manufacturers saw their market share jump to 27.9% from 25.5%.
Industrywide sales for May were 1,623,902, with passenger cars representing 51.4% and light trucks--minivans, pickups and sport-utility vehicles--48.6% of the total. The gains by the Japanese and European makers should result in an annualized industry sales rate of 17 million for May, in line with 1999’s record full-year sales.
“The first signs of weakness are showing up in the players who have holes in their lineups,” said George Magliano, an analyst with WEFA Group in New York.
GM’s decline was fed by slowing car sales, as discounts failed to draw buyers to its Oldsmobile and Buick brands. Analysts blamed an aging product line for the drop at Chrysler.
Despite last month’s weakening sales, many auto dealers continue to report few obvious effects on business from rising gasoline prices and interest rates. Nevertheless, many analysts say those factors may be starting to take the wind out of a yearlong buying spree.
In May 1999, when the annualized selling rate hit 17.3 million, the U.S. sales boom began in earnest. Until last year, 15 million was generally considered a strong performance. Percentage changes posted Thursday reflect one additional sales day last month compared with May 1999.
GM’s sales of cars and light trucks fell 5.9% to 453,001, a bigger decline than the 4% average analyst forecast. Car sales at Oldsmobile, the division on which GM is counting to compete with consumers historically attracted to Japanese makers’ mid-size models, fell by more than 25%.
Ford sold 415,413 cars and light trucks, ahead of forecasts that sales would be little changed. New models such as the Focus, the Sport Trac and the SuperCrew four-door version of its F-Series pickups helped the company’s Ford division break a May sales record set in 1978.
DaimlerChrysler’s U.S. sales of cars and light trucks excluding Mercedes-Benz fell 17.7% to 243,151 in May, more than the 15% drop that analysts had forecast. Mercedes-Benz sales dropped 3% to 16,803.
GM, Ford and DaimlerChrysler continued to spend heavily on incentives, a combined average of $1,906 for each vehicle sold in April--or 5% more than in April 1999--according to Autodata Corp. The U.S. auto makers spent $268 more than the industry average in April, the most recent month available; Ford generally had the lowest rebates of the three.
DaimlerChrysler this week raised cash rebates, and GM is expected to follow suit.
The stocks of the American companies mirrored their monthly sales reports, as GM fell 81 cents to $69.81 and DaimlerChrysler fell 31 cents to $53.63 on the New York Stock Exchange. Ford rose 94 cents to $49.50, also on the NYSE. For the year, GM is down 4%, DaimlerChrysler 31% and Ford 7.2%.
Among the importers, the U.S. arm of Mitsubishi Motors Corp. posted the best month in its 18-year history, with sales up 26.2% on the strength of its SUVs and restyled Galant sedan. South Korean auto makers also posted strong gains, with Hyundai Motor Co. up 52%, Kia Motors Corp. up 7.1% and the fledgling American unit of Daewoo Motor Co. posting a 118% gain for the month as it continued adding new dealerships and opening new territories.
The Europeans’ combined U.S. market share hit 4.6% in May, up from 4.1% a year earlier. Ford-owned Volvo and Jaguar and GM-owned Saab are not included in the European tally.
