DETROIT -- Ford Motor Co. and General Motors in May posted their smallest monthly sales declines since last summer, helping the overall U.S. industry improve again while Honda and Toyota dropped more than 40 percent.
Overall sales fell 33.7 percent, the smallest decrease since Octobers 31.9 percent. The seasonally adjusted annual rate was 9.9 million, the highest of 2009. May's industrywide sales of 926,130 marked the first monthly total this year above 900,000.
If youre rooting for the Americans, thats what passes as bright news: that they were down less than their competitors, said Efraim Levy, an equity analyst with Standard & Poors.
Ford Motors 25.8 percent light-vehicle sales decline was its lowest since July 2008, and GM's 29.0 percent skid reflected its smallest decrease since September. American Honda said its sales plummeted 41.5 percent from May 2008, when the company set a monthly sales record. Toyota Motor Sales fell 40.7 percent, and Nissan North America slid 33.1 percent.
Chrysler LLCs sales tumbled 46.9 percent in May, dragged down by a decline of more than 90 percent in fleet volume stemming from its factory shutdown during bankruptcy. Retail sales fell 30 percent, the automaker said.
Last years turmoil
The smaller declines at Ford and GM, which filed for Chapter 11 reorganization yesterday, stem in part from comparisons to last year, said Jeff Schuster, executive director of forecasting at the market research firm J.D. Power and Associates.
Average U.S. fuel prices in May 2008 hit $3.97 for a gallon of regular unleaded, according to AAA. The rising prices attracted consumers to Honda, a brand consumers view as fuel-efficient, Schuster said.
Hondas sales rose 15.6 percent in May 2008 from the year-previous period, while GMs fell 27.5 percent, Fords 15.9 percent, and Chryslers 25.4 percent. Toyota gained share as its sales fell 4.3 percent.
Last months sales also indicate that some consumers are showing support for U.S.-based automakers, Schuster said of Fords and GMs results. President Barack Obama urged the nation to buy American vehicles as he announced Chryslers bankruptcy on April 30. Schuster also said Ford is benefiting from not seeking government aid.
Elsewhere in the industry, Volkswagen Group slid 12.5 percent. Daimler AG's sales fell 33.4 percent, and the BMW Group dropped 27.6 percent. Subaru slipped 5 percent; Mazda, 40.1 percent; and Hyundai-Kia 18.7 percent.
The Chrysler effect
Some analysts had said Chryslers retail sales rate would show a boost from clearance sales at dealerships being terminated. On May 14, Chrysler told 789 of its dealerships that they would not have a future with Chrysler Group LLC, the new company set to be steered by Italian automaker Fiat S.p.A. after a scheduled emergence from the automakers bankruptcy on Friday. Those dealerships have one week left to sell their Chrysler inventory.
Ford said it sold 35,582 crossovers, more than any month since May 2008, and its Lincoln luxury brand posted an increase of 2.4 percent.
Sales of 2,780 Insights drove a 3.5 percent increase in Honda's hybrid sales. The new Insight launched in May.
Ford said it would begin a "Drive the Ford Difference" incentive program today, in which the automaker will cover up to three months of payments on select vehicles, for a total not to exceed $2,100. Ford Credit will also offer 0 percent financing on some vehicles. The program lasts through June 30.
Ford already is anticipating fire-sales at other automakers' dealerships because of liquidations, said Ken Czubay, Fords vice president of U.S. sales and marketing. In addition to the Chrysler closings, GM has notified 1,324 dealerships it does not plan to renew their franchises beyond October 2010.
"For consumers and for the industry, the next 90 days will be challenging and volatile," Czubay said.
The U.S. sales rate dropped below 11 million units in October, hitting lows not seen in more than a quarter of a century. The rate has hovered between 9 million and 10 million units this year amid an 18-month U.S. recession, the longest since the Great Depression.
Last year's industry sales total was 13.2 million, down from 16.2 million in 2007.