U.S. Auto Sales Decline 5.7% in May
Auto makers reported Monday that U.S. auto sales declined about 5.7% in May, falling well below industry forecasts and hitting their weakest pace this year as shoppers eased spending on new cars and trucks.
But even as they reported sharp drops in sales, there was some good news from major auto makers.
General Motors Corp. said it was raising its earnings outlook and Ford Motor Co. said it was setting its third-quarter North American production estimate at a robust 940,000 vehicles, a 16% increase over a year ago.
Still, GM, the world’s largest auto maker, said its May U.S. vehicle sales dropped by a surprising 12% while Ford, No. 2, reported an 11.5% fall in sales.
Ford, in the midst of a turnaround plan, has been dogged by double-digit drops in sales every month except April so far this year. But its cross-town rival GM has enjoyed mostly stronger sales, buoyed by its strong new lineup of pickups and sport utility vehicles.
With most all auto makers reporting, May’s sales ran at a seasonally adjusted annual rate of about 15.6 million, lower than January’s rate of 15.8 million. Isuzu Motors Corp. will report May results today, but its sales are too small to change the industry results significantly.
Most industry analysts had predicted that May auto sales of cars and light trucks would come in at a seasonally adjusted annual rate of about 16.8 million vehicles, compared with a robust 16.7 million rate in the same month last year and a 17.4 million rate in April.
Sales of cars built in the U.S., Canada and Mexico fell 10.3%, while sales of domestic-built trucks fell 5.2%. Import car sales rose 4.8%, while import truck sales were up marginally.
Major players including Honda Motor Co. and Volkswagen were among those reporting lower U.S. sales. Honda’s sales dropped 11%, while VW’s fell 6.7%.
Meanwhile, Toyota Motor Corp., Japan’s largest auto maker, reported its best month ever for U.S. sales, with a 3.6% increase from a year ago.
Other high-volume auto makers bucking the downward trend included the Chrysler arm of DaimlerChrysler, which saw U.S. sales rise 4%, and Nissan Motor Co., with a 2% increase.
GM said that while May sales were weaker than many predicted, sales for the year so far are exceeding forecasts.
GM said it expects second-quarter earnings of $2.50 a share, excluding its Hughes Electronics Corp. unit. That compares with an estimate of $2 a share. Including money-losing Hughes, GM expects earnings of $2.40 a share for the second quarter, up from its forecast of $1.90.
For the year, due to continued cost-cutting and a strong sales outlook, GM said it expects earnings of $6 a share, excluding Hughes and special charges, up from its guidance of $5.
