Auto Sales Strongest in 9 Months
Automakers on Wednesday posted their strongest U.S. monthly sales results since August, after discounting heavily in May to lure buyers as gasoline prices surged. Even some gas-guzzling pickups and SUVs flew off the lots.
With all leading companies reporting by Wednesday afternoon, industrywide May sales rose 7.4% to a stronger-than-expected seasonally adjusted annual rate of 17.8 million.
That was up sharply from a disappointing rate of 16.4 million in April and probably will prompt the revision of many May U.S. retail sales estimates.
The auto industry, which generates about 4% of U.S. gross domestic product, accounts for about one-fifth of the country’s retail sales.
May’s winners included General Motors Corp. GM said its sales rose a steeper-than-expected 6.5%, buoyed by an 11% gain in truck sales.
DaimlerChrysler’s Chrysler division said its May sales rose 5%, lifted by demand for the Chrysler 300, the company’s new flagship sedan.
Ford Motor Co., hurt by an aging vehicle lineup that has driven its sales lower all but one month this year, said its May sales fell 3.1%.
On an adjusted basis the No. 2 U.S. automaker posted a 1% gain in sales, however, after accounting for one fewer selling day in May this year and excluding its foreign brands Volvo, Jaguar and Land Rover.
May started where April ended, with slow sales in much of the country amid fears that gas prices and pain at the pump could hurt vehicle sales. Rising interest rates and the debt-heavy position of many potential car buyers were also seen as factors deterring sales.
But automakers responded by boosting already high consumer incentives, particularly on big pickups and sport utility vehicles, sacrificing profits to help cut bloated inventories.
Among foreign brands, Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. joined a host of others in posting double-digit May sales gains.
Toyota said it was its best month ever after 47 years in the U.S. market.
Some car dealers and industry research firms have said record high gas prices were prompting consumers to trade in large SUVs or pickups for cars and were raising interest in buying fuel-efficient gas-electric hybrid vehicles.
But Jim Press, vice president and chief operating officer of Toyota’s U.S. operations, said the effect of higher fuel prices was marginal.
Toyota, known for its hybrids and fuel-sipping cars, is among leading automakers hoping to grab more share of the lucrative U.S. light-truck market from Detroit.
“We have not seen a major shift to smaller, more fuel-efficient cars, and the light-truck segment is still showing its strength,” Press said.
Senior GM executives also played down the gasoline effect.
“There is no trend away from large sport utilities with big V-8 engines,” GM Vice Chairman Bob Lutz said.
Sales of GM’s gas-thirsty Hummer H2 were down more than 31% in May.
But many other full-size sport utility vehicles and trucks from General Motors posted gains, with total SUV sales jumping 19%.
