Ford’s May sales fall 24 percent
The stalled-out auto industry finally may be sputtering to life.
Sales of cars, pickup trucks and sport utility vehicles in the U.S. plummeted almost 34% in May compared with the same month in 2008, according to Autodata Corp., marking the 17th consecutive year-over-year decline in monthly sales. Every mass-market automaker reported a decline.
But industrywide sales were up almost 13% compared with April, and new vehicles sold at an annualized rate of 9.9 million -- the highest rate this year.
“Clearly, we’re starting to see the industry, both globally and in the United States, start to see a turn for the positive,” said Mike DiGiovanni, General Motors Corp.’s lead sales analyst. “We think we’re starting to emerge from this global downturn.”
GM, which filed for Chapter 11 bankruptcy protection Monday, saw its May sales fall almost 29% compared with the same month a year ago, according to Autodata. But sales were up 11% compared with April.
The increase from April was particularly gratifying for GM, which spent the month dealing with a well-publicized slide into bankruptcy and a controversial plan to drastically cut its dealer ranks. GM executives said sales picked up markedly at the end of the month, even as it became apparent that the company was headed for Bankruptcy Court.
“This gives us a lot of confidence that some of the negative issues we’ve had to deal with are behind us and haven’t affected our sales,” DiGiovanni said. GM said supportive comments from President Obama may have helped reassure consumers, who also may have grown somewhat inured to news of corporate disarray over the last several months.
Auto website Edmunds.com said last week that reports from dealer showrooms indicated that GM’s and Chrysler’s financial struggles weren’t necessarily scaring away buyers, who came looking for deals.
“Clearly, media coverage of a potential bankruptcy or liquidation does impact sales, but the stigma of bankruptcy seems to have been vastly overstated,” Edmunds said.
Chrysler, which filed for Chapter 11 bankruptcy protection April 30, said May sales fell 47% compared with a year earlier. May was still the automaker’s best month of the year, with sales of its Chrysler, Dodge and Jeep brands showing double-digit percentage increases from the previous month, Chrysler said.
Ford Motor Co. reported that its year-over-year sales of cars and light trucks fell 24% in May, but noted that its sales were up 20% over April. The company said May was its strongest month for sales since July 2008. Ford, which like other automakers has been cutting output to reduce swollen inventories, said it planned to modestly increase North American production in the second and third quarters.
Sales analysts at Ford cautioned that the next three months probably would be volatile as GM and Chrysler worked their way through bankruptcy and the economy struggled to find firm footing.
“It’s still a very fragile industry,” said Ken Czubay, Ford’s vice president of sales and marketing. “This isn’t any time to rejoice. It’s just a slight uptick.”
GM and Ford reported better results than their two biggest Japanese rivals. Toyota Motor Corp. and Honda Motor Co. reported year-over-year sales declines of 41% and 42% in the U.S., respectively, according to Autodata. Like Ford and GM, Toyota reported an uptick compared with April, notching a 20% month-to-month sales gain. But Honda’s sales fell almost 3% compared with April.
Nissan had the best performance of the Big Three Japanese automakers, posting a 33% decline in U.S. sales last month. It notched a 43% jump in sales from April.
Honda and Nissan offered record incentives in an effort to sell vehicles, Edmunds.com reported. GM, Ford and Chrysler all offered higher incentives than in May 2008, with Chrysler spending an average of $4,159 per vehicle. But all three U.S. automakers paid out less for incentives than they did in April.
U.S. auto sales have plummeted as the credit crisis and the worst recession in decades have kept consumers out of dealer showrooms. But scattered signs that the economy has halted its tailspin appear to be luring buyers back into showrooms.
“Consumer confidence, a key factor in car buying, rose in May by the most in six years and is now at a level not seen since last September,” Michelle Krebs, senior editor at AutoObserver.com, said in a report last week. “This good news couldn’t come soon enough for the auto industry, and the benefits are already coming in for most automakers.”
The current stock market rally, which has seen the Dow Jones industrial average jump 33% since early March, also is helping car sales, analysts said, although there has been some concern that the rapid rise in gasoline prices since the start of the year could damp car buyers’ enthusiasm.
Ford said sales of its new Ford Fusion and Mercury Milan hybrids helped boost its monthly performance, as did strong sales of its redesigned 2010 Ford Mustang.
GM said its new Chevrolet Camaro was selling as fast as it could be delivered to dealers, and noted that sales of full-sized pickups were strong late in the month. That could be a harbinger of good news in the housing industry; building contractors are major buyers of pickups.
Overall, sales of small cars plummeted 50% compared with May 2008, continuing the trend that began last fall when pump prices began to slide. Analysts noted that a year ago, consumers were scrambling to buy small cars as gas prices approached $4 a gallon, making for tough comparisons.
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