If someone back in early 2011 had predicted May’s US light vehicle sales, they would have been laughed out of the business. The Detroit automakers taking the three top spots? Nonsense! The best-selling car is a Chevrolet? Unthinkable! Chrysler outselling Toyota? Delusional!
Yet it all happened last month.
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Wards reports Americans acquired almost 1.06m cars and trucks in May. Volume was down 3.9% compared to last May and 8.4% compared to April 2011. Correcting for daily sales rate (DSR), sales were up 4.1%. This yields a seasonally adjusted annualised rate (SAAR) of 11.80m sales, ahead of May 2010, but well short of the 13m-plus rate of the past few months and the lowest SAAR since September 2010.
April was too soon for the natural disasters in Japan to have a real impact but they made their mark in May. Japanese brand sales fell 16.0% costing their market share 7.3 points. Hyundai and Kia, both of which reported new records, were the primary beneficiaries: their share grew from 7.3% to 10.2%. The Detroit Three picked up 2.5 points and the Europeans added two.
All three Detroit automakers saw their sales grow in May, though volumes were down slightly at Ford and GM. Excluding their discontinued brands, both Ford and GM would have finished in the plus column. Chrysler sales volume rose 9.6% thanks to the Ram pickup and Jeep brand.
Of the Japanese brands, only Mitsubishi and Suzuki finished ahead of May 2010. Toyota took the biggest hit, with sales down 27.9% and volume down by a third, followed by Honda, down 16.1% in sales and 22.5% in volume. Subaru not only didn’t set another record, its sales fell 8.3%.
All the European manufacturers reported improved sales, coming in second only to the Koreans in gains. Audi set a new May sales record.
Lexus ads tout its years as the top luxury brand but it’s currently a distant third to BMW and Mercedes. Premium sales were down slightly more than the overall market last month due primarily to large declines in sales of Lexus, Acura and Infiniti.
Though petrol prices are easing, they’re high by US standards so it’s no surprise the small car segment rose 22.2%. Chevy’s Cruze was the hot ticket last month, followed by the Ford Focus. CUVs and mid-size SUVs were even more popular: sales rose 47.6%. Pickup sales fell 11.4% but the biggest losers were large SUVs: demand fell 27.8% in May.
There were many forces working on May sales. In addition to supply shortages, transaction prices were at record levels and incentives were the lowest they’ve been in eight years. These may have prompted some car buyers to remain on the sidelines.
Looking ahead, consumer sentiment may decline as budget shortfalls force governments to lay off thousands of employees. The housing market is back in a recession with no sign of recovery. All of these factors could create a rough few months even as the Japanese are recovering more quickly than originally foreseen.
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