automotive

U.S. Auto Sales Decline In May

The auto industry took a hit in May, with General Motors, Ford and other manufacturers reporting lower U.S. vehicle sales for the month, partly due to two fewer selling days. Fiat Chrysler was up slightly.

“The sky is not falling,” says Michelle Krebs, senior analyst for Autotrader. “We have long anticipated smaller year-over-year increases and even dips.  However, car sales remain at lofty levels, with 2016 anticipated to match or surpass 2015’s record. In addition, a profound shift is occurring in the market -- both in the United States and globally, including both luxury and non-luxury -- away from traditional cars and to sport utilities.”

General Motors sales to individual or “retail” customers were down 13% from last May, largely due to two fewer selling days and very tight supplies of new launched products. 

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Ford reported an overall 6% drop with car sales falling 25% and sales essentially flat for its SUVs and up 9% for its trucks. Sales for the best-selling vehicle in the U.S. market, the company's F-Series pickup, rose 9%.

Fiat Chrysler reports that May sales increased 1%, which makes it the company’s best May since 2005. Jeep brand sales were up 14% which is the brand’s best monthly sales ever. Jeep Renegade and Jeep Patriot each posted their best monthly sales ever. In its second month on sale, the all-new 2017 Chrysler Pacifica minivan posted sales of 2,495 units, up significantly from the 487 units sold in its initial month on sale in April.

“Initial sales of our all-new Chrysler Pacifica minivan are brisk and we expect further sales growth from this vehicle over the next few months as dealer inventory continues to build,” says Reid Bigland, senior vice president-sales, FCA-North America.

The Pacifica topped Autotrader’s list of biggest movers in May.

“The not-your-soccer-mom’s minivan, with its SUV styling cues and promoted in commercials with comedian James Gaffigan calling it ‘good for my dad brand,’ is resonating with family hauler shoppers,” Krebs says.

The Mazda CX-9 arrived in dealerships late in May. In just one week of sales, the all-new CX-9 accounted for nearly 600 vehicle sales. Mazda said it expects a strong performance from its all-new three-row crossover SUV as inventory continues to arrive.

At GM, customer demand has significantly exceeded supply for new vehicles like the Malibu, Cruze, XT5 and CT6.  

“The demand has been so strong for our new launch products, there’s no question we could have sold more, however, production was impacted at Fairfax, Lordstown and Spring Hill by the Japanese earthquakes,” says Kurt McNeil, GM vice president of sales operations. “Current dealer inventories for launch products are about half of what we’d like for launch products, but availability is improving, which sets us up well for the second half of the year.”

At other automakers, Honda sales fell nearly 5%, Nissan sales fell 1%, Toyota sales dropped 9.6% and Mazda’s declined 4.3%.

However, the outlook for the year remains for another record year, and nothing in May’s results suggests otherwise, says Stephanie Brinley, senior analyst, IHS Automotive.

"SUVs continue to perform well, to the detriment of car sales, and generally brands with stronger SUV lineups are reaping the rewards," Brinley says. "Despite a more difficult May, interest rates remain low and fundamentals solid. Our full-year forecast remains at 17.8 million units, which is a 1.8% year-over-year gain. Several new-vehicle launches in April and May should contribute to brand performance the second half of the year, including Mazda CX-9, Honda Ridgeline, Cadillac XT5, and Maserati Levante, among others.”

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