TOYOTA
Reed Saxon  /  AP file
The growing popularity of Japanese automakers' pickups and SUVs have resulted in shrinking sales for GM and Ford.
updated 6/1/2005 6:04:13 PM ET 2005-06-01T22:04:13

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.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.14%
Source: Bankrate.com