April 18, 2024

Detroit Auto Makers Topped Importers in Sales in May

Toyota’s 33 percent decline allowed Chrysler, whose sales rose 10 percent, to climb into third place last month. For the first time ever, Hyundai Kia Automotive Group, the South Korean parent of the Hyundai and Kia brands, outsold Honda, whose sales were down 23 percent.

Inventory constraints and higher prices combined to drag the industry’s annualized selling rate to its lowest level of the year as some shoppers decided to hold off in the hopes of finding a better deal or wider selection later.

“Some buyers looked at the reports or maybe heard something about it and decided to wait instead of going down to the showroom and look,” Jeff Schuster, executive director for global forecasting at the research firm J.D. Power Associates, said.

The Ford Motor Company and General Motors reported small declines in their sales but pointed to positive signs in purchases of smaller vehicles as fuel economy became a stronger selling point.

G.M. said its sales decreased 1.2 percent over all but increased 13 percent for its passenger cars.

Ford reported a 2.3 percent decline, counting year-ago sales of the Volvo brand, which it no longer owns; sales by its Ford and Lincoln brands were up almost 5 percent. Small cars and crossovers accounted for 27 percent of Ford’s sales, up from 19 percent a year ago.

“The market took a little bit of a breather,” Robert S. Carter, a Toyota group vice president, said on a conference call. Mr. Carter said Toyota is “well ahead of our recovery plans” in Japan and is adding more discounts in June to draw in shoppers.

“We remain very bullish on the direction of the industry,” Mr. Carter said.

Meanwhile, some carmakers reported large gains. Kia’s sales rose 53 percent to an all-time monthly record of 48,212, and Hyundai’s were up 21 percent. Volkswagen said sales rose 28 percent and that May was the company’s best month in nearly eight years.

Across the industry, sales were down slightly from a year ago, after increasing about 20 percent on a year-over-year basis from January through April. Toyota and Honda were affected the most by the earthquake and tsunami that struck Japan in March.

Don Johnson, G.M.’s vice president for United States sales operations, said “consumers sat on their hands” for much of May, but he was confident the industry’s sales pace would rebound later this summer.

“We continue to believe that the recovery remains on track,” Mr. Johnson said on a conference call.

Toyota and Honda said their plants were building more vehicles, but it would take time for inventory at their dealerships to approach more normal levels. Many of the most popular — and most fuel-efficient — Japanese models have become somewhat scarce on dealer lots, causing some consumers to either look at other brands or put off shopping until inventories can be restocked.

“Toyota and Honda lost significant market share in May after cutting their incentives drastically to preserve inventories,” Brian A. Johnson, an analyst with Barclays Capital, wrote in a report to clients. “This strategy appears to have somewhat backfired on them, and Toyota had to raise incentives back midmonth in order to limit the damage.”

TrueCar.com, a Web site that tracks vehicle sales and pricing, said incentive spending by automakers, which included cash-back rebates, subsidized financing rates and other deals, fell in May to the lowest level in nearly nine years.

At the same time, automakers have been raising prices to compensate for higher raw material costs; Ford this week announced the third price increase for its lineup this year. In addition, dealers have been able to charge more for many models that are highly fuel-efficient or for which demand is much greater than the available supply.

Mr. Johnson estimated that May’s annualized selling rate would come in at 12.1 million, down from 13.2 million in April. Most analysts and automakers expect sales for all of 2011 to top 13 million and are sticking with those projections despite the slowdown in demand.

Unlike in 2008, when surging gas prices cut deeply into auto sales, fuel costs are not expected to scare shoppers away from dealerships.

“Customers increasingly are demanding new products that deliver compelling fuel economy,” Ken Czubay, Ford’s vice president for United States marketing, sales and service, said in a statement. “Ford’s new fuel-efficient products and powertrains arrived at the right time.”

Article source: http://feeds.nytimes.com/click.phdo?i=6b6babb2e8d9e6a1fc030a9dcf0b2b1e

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