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June 4, 2003

EXCLUSIVE: USA (includes data): May sales confound gloomy forecasters

Once again, Americans confounded the prophets of doom. Contrary to predictions of a slump, automakers posted better numbers last month than in May 2002, writes Bill Cawthon. Ward's Auto reports total sales exceeding 1.57 million cars and light trucks, good enough to shave almost 2% off the year-to-date sales deficit.

By bcusack

Once again, Americans confounded the prophets of doom. Contrary to predictions of a slump, automakers posted better numbers last month than in May 2002, writes Bill Cawthon.

Ward’s Auto reports total sales exceeding 1.57 million cars and light trucks, good enough to shave almost 2% off the year-to-date sales deficit.

GM posted the best results of the American manufacturers, with a 4.3% increase. Chrysler reported a 3.3% decline, based on daily sales rates, while actually selling more cars and trucks. Ford slipped 3.8%, mostly due to weakness in its Jaguar and Mercury brands.

Toyota set a new all-time sales record, while Honda had its best May ever. Nissan also came in with improved sales, thanks to another strong showing from its premium Infiniti brand. Other Japanese makers did not fare as well: Mitsubishi sales sank more than 33% while Isuzu, Mazda and Suzuki also saw double-digit drops.

The German premium brands reported good results. While sales of the X5 SUV remain slow, BMW’s car sales are 8.5% ahead of May 2002. Mercedes was up as well, thanks to a 100% improvement in sales of the new E-class.

Audi also improved in May, though it is still behind 2002 in year-to-date sales, but Volkswagen sales continue to lag. VW has managed to sell just 20 Phaetons in two months and has yet to report any Touareg luxury SUV sales.

VW might draw some hope from Porsche’s Cayenne, which is still selling briskly. Sales of the Boxster and 911 are down, but the addition of the Cayenne to its model line plus good results from Canada gave Porsche North America its best monthly sales results ever.

Falling petrol prices fuelled strong SUV sales in May. SUVs, CUVs and other segment-straddling model lines claimed more than 26% of total light vehicle sales last month. GM reported record light truck sales and Ford’s SUVs set a new benchmark.

The addition of the car-based CUVs is enlarging the bite that SUVs take out of Detroit’s passenger car sales. The Big Three all reported weak car sales, giving up more ground to the imports. Last month, more than 55 of every hundred cars sold wore an import nameplate.

The big Ford, Chevrolet and Dodge pickups kept the top three sales spots, followed by the Toyota Camry and Honda Accord, but there were some changes in the top 10 where the Toyota Corolla and Chevrolet Impala came in ahead of the Honda Civic. Hampered by weak fleet sales, the Ford Taurus dropped to 10th in the monthly standings.

Detroit has decided rebates aren’t enough. On top of incentives now up to $US4,500, GM has launched its “mea culpa” campaign in hopes of recapturing market share. Chrysler will spend a million dollars a day on advertising during the summer months, hoping to reverse declining sales. All automakers hope recent tax legislation will help sales in the coming months.

May proved to be a pleasant surprise. If the automakers can maintain this sales level for the next couple of months, they have a good chance of beating 2002’s result.

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