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May wild month in U.S. light vehicle sales

by Bill Cawthon on

If May’s U.S. light vehicle sales had been a card game, it would have been played with 52 Jokers. Let’s just go down the list of improbables: The Ram pickup outperforms all others; Chrysler not only outsells Honda, but outsells Toyota, too; the best-selling car is a Chevrolet; in a time of high gas prices and a shift to small cars, Jeep sales soar 55 percent. If you’d bet the odds of those in Vegas in January or February, you could have made a fortune yesterday.

When the counting was all done, Chrysler was the No. 3 automaker, behind General Motors and Ford (seems like the good ol’ days!). The Ram was the only full-size pickup to report improved sales. The best-selling car was the Chevrolet Malibu and Jeep did defy the odds. The Wrangler was the best-selling body-on-frame SUV, the Grand Cherokee outsold every one of its midsize SUV competitors, domestic or import, except the Ford Explorer. Chrysler was also the only one of the Detroit automakers to finish the month ahead on volume: both Ford and GM missed their 2010 numbers by a small factor.

The performance of the Ram is even more significant considering sales of full-size pickups fell 12.7% in May and total pickup sales fell 11.7 percent. That’s the third-largest segment drop after Large SUVs and Large Sedans (which includes the Chrysler 300 and Dodge Charger).

Incidentally, GM made a big deal about the new Cruze outselling the old Cobalt by 150 percent, which it didn’t: the actual margin was 140.4 percent. However, the new Chrysler 200 really did deliver the goods, outselling the Sebring by 153.7 percent.

Chrysler added 1.4 points of market share to its total in May, accounting for 10.9 percent of sales. Combined, the Detroit manufacturers claimed 49.7% of light vehicle sales in May, up from 47.2% a year ago. Passenger car sales accounted for 51.5% of sales, up from 51% in May 2010.

Of course, all of this welcome shift in market share couldn’t have happened without somebody giving some up and those somebodies were the Japanese. The March disasters didn’t really have much of an impact on April sales but they left an indelible mark on May sales. Toyota sales dropped by a third as the leading Japanese car company gave up 4.2 points of share. Honda was 22.5% short of its May 2010 numbers, giving up another 2.1 points, and Mazda missed by 20.9 percent, for a loss of 0.3 points. Nissan sales fell 9.1% costing it 0.4 point. Of all the Japanese automakers, only Mitsubishi and Suzuki finished May in the black. Even perennial record-setter Subaru came up short in May.

While the hometown team gained some share, the big winners were the Koreans. Regular as clockwork, Hyundai and Kia announced new sales records and added a combined 2.8 points to their share. More and more analysts are lumping Hyundai and Kia together, since Hyundai owns both, and counted that way, they would have finished in fifth place with a 10.1% market share, less than a thousand sales behind Toyota.

With the the exception of Smart, all the European automakers came in ahead of their May 2010 results. Audi set a new May sales record, breaking the 10,000 mark and parent company Volkswagen sold more than 30,000 cars for its best month since August 2003. Jetta sales increased 158.6 percent, so maybe GM’s boast about the Cruze isn’t all that big a deal, after all.

BMW took the lead in the premium segment, though Mercedes-Benz leads in the year-to-date (YTD) totals. Lexus is currently running TV ads touting its long run as the top-selling premium brand. Perhaps the brand is reliving pleasant memories, because the upscale Toyota is currently running a distant third in the rankings, barely ahead of Cadillac. Luxury segment sales fell 4.9% due to plunging sales of Lexus, Acura and Infiniti vehicles.

Overall, the automakers reported just over 1.06 million light vehicle sales, a 3.7% decline from May 2010 and an 8.3% drop from April 2011. The seasonally adjusted annualized rate (SAAR) for May was 11.80 million light vehicle sales. That’s better than last May’s 11.64 but a big drop from the 13-million-plus pace set in February, March and April. In fact, it’s the lowest SAAR since last September.

So how long will these conditions prevail? It’s tough to say at the moment. The Japanese automakers seem to be ahead of the recovery schedules they had previously announced, but there’s more than just a shortage of Prii and Fits at work. Cash-strapped state and local governments are continuing to furlough or dismiss employees by the thousand. The housing market is in a double-dip recession with no real recovery in sight. Oil prices are easing but speculators are still trying to keep the price above $100/barrel. Congress can’t agree on the time of day, let alone where the country should be headed. New vehicle transaction prices are at record highs and incentives are at their lowest in nine years: there aren’t any exceptional deals right now. These are all things that could keep consumers on the sidelines in the months to come.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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