Asian brands outsell Big 3 in May
U.S. auto sales tumble 11% as pickup and SUV market falls off sharply.
Asian automakers outsold Detroit’s Big Three for the first time in May as the industry continued its dramatic shift toward more fuel-efficient cars.
Helped by a reputation for fuel-sipping models, Asian brands captured 47.8 percent of the U.S. market, while American automakers held just 45.4 percent of their home turf last month.
Exemplifying the landslide toward cars, the Honda Civic supplanted the Ford F-Series pickup as the nation’s best-selling vehicle.
“May was a watershed month,” said Jim Farley, Ford Motor Co.’s group vice president for marketing and communications. “We as an industry are catching up with breathtaking choices customers are making.”
Last month, 57 percent of all vehicles sold were passenger cars, according to Autodata Corp. A year ago, they accounted for less than 50 percent of the market.
Overall, truck sales continued their nosedive in May, falling 23.6 percent, while cars posted a modest 2.4 percent increase.
The Civic, Toyota Camry, Toyota Corolla and Honda Accord all outsold Ford’s flagship vehicle last month, marking May as the first month since the early 1990s that a car, not a pickup, was the best selling vehicle in the United States. On an annual basis, the F-series has been the nation’s top-selling vehicle since 1981.
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all gained market share in May, while the Big Three all lost ground. The total Asian market share includes Mazda Motor Co., a Japanese automaker in which Ford holds a one-third and controlling stake.
In times of high gas prices and economic uncertainty, consumers are choosing brands with a reputation for fuel economy and reliability, said Joe Barker, senior manager for global vehicle sales at Northville-based CSM Worldwide.
“The Japanese have built a longstanding reputation for delivering fuel-efficient vehicles, and that’s paying dividends for them now,” he said.
Barker added that higher resale values for brands such as Toyota and Honda allow their customers to get a good trade-in, while buyers of traditional American vehicles may find they owe more on their car than it’s worth, causing them to put off buying a new model.
Sales plunge in May
Burdened with lineups heavy with trucks and SUVs, Detroit’s Big Three automakers each reported dramatic sales declines in May compared to a year ago. General Motors sales were down 27.5 percent, Ford’s fell 15.8 percent, and Chrysler LLC sales dropped 25.4 percent, according to Autodata.
Honda sales rose 15.6 percent, while Toyota reported a 4.3 percent decline. A struggling economy pushed overall industry sales down 10.7 percent last month compared to May 2007.
With the price of a gallon of gas hitting $4 in many areas of the country last month, Ford and GM are coming to grips with customers fleeing SUVs and trucks, which once buoyed their volumes and profits. Both automakers have announced drastic restructuring plans that significantly cut truck production while bolstering output of cars and crossovers.
GM said it lost 15,000 to 18,000 sales in May due to production slowdowns caused by strikes at supplier American Axle & Manufacturing Holdings Inc. and two GM factories.
The walkouts made it difficult for customers to find GM’s more popular models, such as the Chevrolet Malibu and the GMC Acadia. Acadia sales fell 28 percent in May. Malibu sales rose 51 percent but GM said the demand was there to sell even more.
“Obviously, most truck segments were weak across the industry — and we were no exception,” said Mark LaNeve, vice president of GM North America vehicle sales, service and marketing. Some lost sales, particularly fleet trucks, will be made up later this year, but others are gone completely, he said.
Ford’s share falls
Floundering truck sales caused Ford’s market share to fall to 15.6 percent, from 16.5 percent a year ago. The company hopes to boost demand for its trucks by offering employee pricing to everyone on F-150, F-250 and F-350 models this month, ahead of the introduction the redesigned F-150 later this year.
“We’ve been 31 years running the leading vehicle in that segment,” Farley said. “We see this as an important merchandising strategy.”
Sales of Ford’s best-selling small car, the Focus, rose 53.2 percent in May to 32,579 vehicles, while sales of F-series pickups plummeted 30.6 percent to 42,973. Farley said the Focus outsold the F-series in dealer showrooms, but commercial and fleet sales gave the pickup more total sales.
May’s sales results reflect consumers’ general shift away from trucks, but the fact that four cars outsold the F-Series is mainly a reflection of record high gas prices, said Tom Libby, senior director of industry analysis at Power Information Network, a unit of J.D. Power and Associates in Troy.
“At the end of the year, the F-150 will still be the top-selling vehicle,” he said. Libby added that high gas prices, which are likely near their peak for the year, encourage people to buy more fuel-efficient vehicles, such as the Civic, while truck buyers are more likely to buy when gas prices fall and incentives increase.
Civic on top
The Civic moving into the top spot marks the first time that a product from Detroit’s Big Three was not the top-selling vehicle in the country. The Japanese automaker’s Fit, Accord and Civic models all posted double-digit sales gains. Honda’s U.S. market share increased to 12 percent, up from 9.3 percent a year ago.
“The dramatic increase in car sales appears to be one of the most profound shifts in automotive buying patterns in more than a decade,” said Dick Colliver, executive vice president of American Honda.
With overall industry sales down, Toyota’s market share grew to 18.4 percent from 17.2 percent a year ago.
Still, its sales suffered in May as the Japanese automaker struggled to bring more hybrids to market. Its flagship hybrid, the Toyota Prius, was off 37.5 percent from a year ago in May.
“We’re continuing to work on the supply,” said Bob Carter, general manager of the Toyota division in North America. “Dealer stock for the Prius is best measured in hours, not days.”
Chrysler’s May sales dropped even as it attempted to lure consumers with a fixed gas price guarantee. Its market share fell to 10.6 percent in May from 12.7 percent a year ago. The Jeep Patriot and Dodge Caliber, two of the Auburn Hills automaker’s most fuel-efficient offerings, were among the few models with improved sales.
After cutting shifts and models late last year, Chrysler has yet to join its rival Detroit automakers in making even deeper cuts as high gas prices and the weak economy dry up demand. Steven Landry, Chrysler executive vice president for North American sales, said the automaker was assessing its production levels. The company’s product lineup is heavily skewed to trucks.
“Customers are voting early this year and they are voting for cars and high mileage vehicles over trucks,” he said. “This month particularly is one that allows us to look deep into the numbers to determine our game plan for later this year.”
Source: Detroit News