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| In a file photo a pair of
Chevrolet Tahoe SUVs are on display under palms and the dealer's
sign at the Rydell Automotive Group General Motors dealership in the
Van Nuys area of Los Angeles, Wednesday, May 4,
2005. |
The U.S. automotive scene changed little in May: General Motors Corp.
and Ford Motor Co. again reported decreased demand for their vehicles,
particularly trucks and SUVs, while Chrysler Group and Asian brands
generally posted positive results.
To make matters worse for GM and Ford — and their suppliers — both
automakers said Wednesday they plan to cut third-quarter production
because of sluggish business. The cuts are sure to hurt the companies'
bottom lines.
George Pipas, Ford's top sales analyst, said May was a weak month for
the industry, especially compared to last year. The seasonally adjusted
annual sales rate for May was 16.6 million vehicles, down from 17.7
million last May. The rate indicates what sales would be for the full year
if they remained at the same pace for all 12 months. Full-year sales for
2004 were about 17 million.
"The consumer appears to have taken a little
pause," Pipas said. "The Memorial Day weekend was pretty strong, but it
didn't outdo
the month-end
reporting of a year ago."
GM and Ford, the nation's two biggest automakers, saw sales slip again
in May as customers continued to turn away from their sport utility
vehicles and trucks in favor of models from Asian competitors. The
traditional Big Three automakers saw truck sales slip 4.4 percent in May,
while Asian automakers saw comparable sales rise 6.9 percent.
GM's car sales fell 1.6 percent and truck sales slid 7.8 percent for
the month compared with May 2004. GM's sales are now off 5.2 percent for
the year. GM hopes that will change next month, when it offers consumers
the chance to buy vehicles at the discount rate normally reserved for
employees.
"Our challenge in the marketplace is breaking through with consumers,"
said Paul Ballew, GM's executive director of global market and industry
analysis. "Our products are better than they are perceived."
At Ford, the No. 2 carmaker behind GM, new vehicle demand fell for the
12th straight month. Truck sales were down 6.4 percent, and total sales
slipped nearly 3 percent for the Ford, Lincoln and Mercury brands. Ford's
U.S. business is off 4 percent for the first five months of the year.
There were some bright spots for domestic
automakers. DaimlerChrysler AG's Chrysler Group said car sales rose 13
percent and truck sales were up 3 percent for the month. The Chrysler 300
sedan and the Chrysler Town and Country minivan
helped the Chrysler brand set an all-time monthly sales
record, the company said.
Ford's Mustang coupe had its highest May sales since 1980, up 47
percent from last May. But that blistering pace will likely subside in
June, Pipas said, because the company can't keep up with demand. GM's
Cadillac division also enjoyed its best sales month in 12 years.
The news for Asian automakers was generally good, though results were
lower than the double-digit increases some companies saw in April. Toyota
Motor Corp.'s sales rose 7.8 percent last month, dragged down a bit by
flat truck sales. Overall sales for the automaker are up 11.9 percent for
the year.
Korean automaker Hyundai Motor Co.'s truck sales are up 23 percent for
the year thanks to its new Tucson SUV, which had a record sales month in
May. Hyundai's sales gained 8.5 percent for the month and 12.5 percent for
the year.
Nissan Motor Co.'s truck sales are up 27 percent for the year, led by
the Armada SUV. Nissan's sales jumped 15.5 percent in May and are up 15.8
percent for the year.
"We're getting on people's shopping lists for the first time" in the
SUV segment, said Jed Connelly, Nissan North America's senior vice
president for sales and marketing.
Honda Motor Co. saw a 19 percent decline in its aging car lineup. But
its trucks, including the new Honda Ridgeline pickup, saw a 14.3 percent
increase over last May. Honda's sales are up less than 1 percent for the
year.
Sales percentages are adjusted for differences in the number of selling
days. There were 24 selling days in May 2005 and 26 in May 2004.
GM, the world's largest automaker, said it plans to cut third-quarter
production by more than 100,000 vehicles, or 9 percent. Ford, meanwhile,
said it plans to trim third-quarter production by 17,000 vehicles, or 2
percent.
Auto suppliers, already pinched by high steel prices, have been
struggling with the cuts all year. GM cut production by around 10 percent
in the first and second quarters, and Ford cut production by 10 percent in
the first quarter and nearly 5 percent in the second quarter.
Pipas said the cuts will help the automakers adjust their inventories
and predicted that production will stabilize in the second half of the
year.
GM shares fell 14 cents to close at $31.39 on the New York Stock
Exchange. Ford shares fell 6 cents to close at $9.92 and Chrysler shares
gained 30 cents to close at $40.59.
(Agencies) | 
Updated: 2005-06-02 10:48
