Fiat Chrysler, Honda and General Motors scored modest U.S. sales increases last month while Ford, Nissan and Toyota fell as the industry appeared poised to record one of the strongest months in nearly a decade.
Sales at FCA US rose 4 percent from May 2014 levels as the automaker tallied its 62nd straight advance. GM, aided by truck- and crossover-brand GMC, climbed 3 percent. The Volkswagen brand chalked up a rare monthly gain, up 8 percent. American Honda benefited from a strong performance at Acura in tallying a 1.3 percent increase.
Ford Motor Co., meanwhile, dropped 1.3 percent. Nissan Group and Toyota Motor Corp. each recorded declines of less than 1 percent. Toyota’s drop marked its first setback in more than a year.
Results from the first automakers to report set the stage for a quirky month in which overall demand was projected to decline from strong year-earlier levels while sales on a seasonally adjusted basis were forecast to come in at one of the most robust paces since the recession.
FCA today estimated the light-vehicle SAAR for May will be about 17.5 million, while GM forecast a 17.6 million pace. If GM’s forecast is on target, the SAAR will be the highest since January 2006. Ford executives suggested the SAAR for May will land well north of 17.5 million units but below 18 million.
“Car buyers continue to pay more for vehicles and mitigate that cost with longer loan terms and low interest rates,” said Jessica Caldwell, an analyst with Edmunds.com, in a statement. “With available longer loan terms, lower interest rates and abundant lease deals, people really are getting get more car for the money.”
Company results
At Ford, volume at the Ford division slipped 1.5 percent on weaker output of F-series pickups. Lincoln posted a 3.7 percent gain. Retail sales fell 2 percent, while fleet sales were flat, the automaker said.
At FCA, volume rose 32 percent at the Chrysler brand, 14 percent at Jeep, and 12 percent at Ram.
Dodge slid 22 percent while Fiat fell 19 percent. Dodge volume has been hurt by the discontinuation of the Avenger midsize sedan and brief suspension of Caravan minivan output to retool an assembly plant in Canada.
Overall, Chrysler’s car sales rose 27 percent while light truck deliveries slipped 2 percent.
Most GM brands were in break-even territory. Buick eked out a 0.5 percent increase while Chevrolet was up 1.4 percent. Cadillac fell 1.9 percent.
GMC, General Motors’ second-biggest brand by volume, scored a 13 percent advance, thanks mainly to the Acadia and the new Canyon mid-sized pickup. The automaker said its retail sales rose 7 percent.
Volkswagen’s boost came primarily from the Golf family, which more than tripled its sales from May 2014. Sister brand Audi extended its industry-leading streak of monthly increases to 67 with an 11 percent advance.
At Nissan, where CEO Carlos Ghosn is pushing for a 10 percent share of the U.S. market, sales by the namesake division fell 1 percent. Infiniti luxury sales rose 0.9 percent, though, for an overall corporate decline of 0.8 percent.
Overall, Toyota Motor Corp.’s sales slipped 0.3 percent. It was the company’s first monthly decline since February 2014. Volume rose 10 percent at Lexus but slid 1 percent at Toyota and 22 percent at Scion.
Among other automakers, volume rose 12 percent at Subaru, 32 percent at Mitsubishi and 0.2 percent at Volvo. Subaru’s U.S. sales have now increased 42 consecutive months and topped 40,000 units for 15 straight months.
Porsche reported a 7.4 percent decline in May deliveries and volume dipped 0.4 percent at Mazda.
Among the seven major automakers, only GM and FCA were projected by analysts tracked by Bloomberg to post gains.
The forecasts
Deliveries across the industry were forecast to fall 1.1 percent for the month to about 1.59 million cars and light trucks, based on the average estimate from 11 analysts surveyed by Bloomberg. There were 26 selling days last month, one fewer than in May 2014.
If those forecasts prove accurate, the industry may have simply run out of May steam. In May 2014, sales rose 11 percent from a year earlier, following fifth-month increases of 8 percent in 2013 and 26 percent the year before that.
The SAAR, meanwhile, was projected by analysts to rise to 17.3 million — the strongest pace since August — from 16.52 million in April and 16.73 million in May 2014.
Such a result would bolster projections that U.S. light-vehicle sales this year will top 17 million for the first time since 2001.
“Light trucks should continue to dominate the total vehicle mix for the foreseeable future, as gas prices remain depressed and a strong credit environment makes it easier for customers to opt for larger vehicles,” Morgan Stanley auto analyst Adam Jonas said in a report Monday.
Kelley Blue Book estimates the average transaction price for light vehicles sold in May was $33,363. That’s up by $1,363, or 4.3 percent, from May 2014, but down $130, or 0.4 percent, from April.
“With the national average price of gasoline down nearly a dollar per gallon on average from one year ago, truck and SUV demand remains strong, elevating average transaction prices, especially for domestic automakers, in May,” said Karl Brauer, senior analyst for Kelley Blue Book. “We also saw incentives spending remain nearly flat in May, which shows the strength of the overall new-car market.”
May sales were stoked by Memorial Day holiday deals that were offered over two successive weekends.
Edmunds.com estimates that 9.5 percent of U.S. buyers who financed a new vehicle in May received a zero- percent loan — the highest percentage since September.
Source: Automotive News
Dave Versical and Nick Bunkley contributed to this report. You can reach David Phillips at dphillips@crain.com.