The U.S. auto sales for May remained quiet despite it being one of the strongest months of the year as per the history books. The industry’s momentum got hurt badly as America’s top automakers General Motors (GM, Financial) and Ford (F, Financial) took a nosedive on account of weak sedan sales and fewer selling days. Sales were down for most of the automakers when compared with the same period last year.
Seasonally adjusted selling rate stood at 17.3 million vehicles, which was higher than April, but down on a year over year basis. May sales plunged 6% to 1.53 million cars mainly because of weakness in demand observed in certain segments and two fewer selling days. The world’s major auto players Toyota (TM, Financial) and Volkswagen (VLKAY, Financial) had a quiet month as sales dropped 9.6% and 17%.
Let’s dig in deep and know in detail the performance of the Detroit Three and other automakers.
Performance of U.S. automakers
General Motors witnessed 18% sales drop to 240,450 vehicles, which was much steeper than expectations. The company’s major brands, namely Chevrolet and Buick, saw huge declines. Cruze Compact sedan saw 30% sales dip in May, which was a year ago, the company’s top selling car. On the contrary, Malibu midsize sedan gained 13% year over year. However, rental car sales plunged 49% for the automaker.
Crosstown rival Ford’s sales for May dropped 6% to 235,997 vehicles. While F-series pickup sales climbed 9%, car sales fell a mammoth 26%. However, Lincoln brand sales surged 7%. While SUV sales remained flat, truck sales rose 9%. Shifting gears, sedan sales were down. Fusion and Focus saw 21.5% and 27% sales decline. On the other hand, Escape witnessed 5.5% sales rise.
Chrysler (FCA), the third largest U.S. automaker, managed to get a 1.1% May sales gain to 204,452 vehicles on the back of solid performance of vans, pickup trucks and SUVs, which somewhat compensated for the poor performance of other car segments. This was the company’s finest May sales in 11 years. While the Jeep brand registered a 14% year over year sales gain, Jeep Compass posted a colossal 116% sales hike. In contrast, Ram pickup truck sales dropped 3% but it hardly has an impact on the company’s overall performance. FCA was the only prime U.S. automaker on which the analysts had not estimated any sort of decline.
Performance of other automakers
The world’s top U.S. automaker Toyota reported a sales decline, down 9.6% to 219,339 vehicles. Car sales dropped 16%, while sales of SUVs and trucks plunged 2.5%. The company’s cars share plummeted to 49% from 53% in May 2015.
Honda’s (HMC, Financial) sales plunged 4.8% to 147,108 vehicles on the back of poor truck sales. However, year to date sales surged 5.7% as compared to the first five months of 2015. Nissan (NSANY, Financial) sales dropped 1% to 133,496 vehicles. While Nissan brand recorded a 1.3% fall to 122,668 vehicles, the Infiniti luxury brand registered a gain of 3.4%. Moreover, car sales plummeted to 2.9%, while SUVs and pickup trucks witnessed a meagre 0.8% rise in sales. Volkswagen sold 28,779 vehicles and 7,129 Passat sedans during the month. Though Volkswagen had introduced a revamped Passat model in 2016, the sedan’s sales were down 12.8% compared with last year.
Last word
Analysts believe that the sales drop could be an indication that the auto industry in America is gradually heading towards a plateau after witnessing six consecutive years of rising sales. Slowing sales could benefit potential buyers as automakers would provide more discounts and offer incentives to boost their sales number. Already incentive spending increased 7% in May and stood around $3,034 per vehicle, according to TrueCar.com.
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