Industry Outlook
The industry’s seasonally adjusted sales rate tumbled to 9.2 million in May from 14.2 million a year earlier, based on 7 analysts’ estimates. That would be a fifth straight month at fewer than 10 million units, the deepest slump in 33 years of Bloomberg data, and mark the 19th month of contraction in the U.S. market. Annual sales averaged 16.8 million this decade through 2007 before plummeting to 13.2 million last year.
Hyundai Motor Co., South Korea’s largest automaker, likely dropped 15 percent, according to auto-research firm Edmunds.com. Hyundai probably benefited from incentives and an image as a value brand, said Jesse Toprak, director of industry analysis for Edmunds.com in Santa Monica, California.
Dealership traffic last month improved over April for automakers including Ford, Nissan and Detroit-based GM.
“The sales pace for the industry picked up owing to some liquidating vehicles at terminating Chrysler dealers,” Ford’s sales analyst, George Pipas, said on a conference call. “GM had a strong close, we thought, from its Memorial Day promotion.”
Pipas estimated that U.S. industry sales fell 33 percent for the month, for an annual rate of about 10 million.
Ford’s Inventory
Ford, based in Dearborn, Michigan, said its inventory of unsold cars fell to 350,000, which represents a 56-day supply, less than the industry standard of 60 days. Deliveries of gasoline-electric hybrid vehicles totaled 3,906, which Ford said was the company’s best month ever.
While Nissan sales remained down, dealerships handled more customers than a month earlier, said Al Castignetti, U.S. vice president for the Tokyo-based automaker.
“It was the best retail sales month for us since August 2008 on a volume basis,” he said.
GM is “modestly encouraged” by May sales, Chief Executive Officer Fritz Henderson said in a CNBC interview today before the company released sales figures. “May was up versus April and was probably our best month since December.”
The automaker’s U.S. market share last month was 20 percent, Vice Chairman Bob Lutz said in a Bloomberg Television interview. GM’s share this year was 19.2 percent through April, according to industry research firm Autodata Corp. of Woodcliff Lake, New Jersey.
Looking for Bargains?
GM and Chrysler both may have attracted shoppers looking for bargains, dispelling “the notion that consumers will refuse to buy cars from a bankrupt automaker,” Edmunds.com said yesterday in a report.
Consumers’ “purchase intent” for Chrysler vehicles rose 72 percent in May compared with April, Edmunds.com said, citing an analysis of traffic on its Web site. For the week ending May 31, a day before GM’s bankruptcy filing, purchase intent for that automaker’s models increased 4 percent, Edmunds.com said.
GM and Chrysler had resisted bankruptcy for months while operating on U.S. aid, saying consumers would shun a company in court protection.
Automakers got a tailwind last month with the increase in consumer confidence as measured by the sentiment index of the New York-based Conference Board. Fewer Americans filed claims for unemployment benefits in the week ended May 23, according to Labor Department figures released May 28.
Still, the recession kept eroding U.S. payrolls, probably sending unemployment past 9 percent for the first time since 1983, according to a Bloomberg survey of 59 economists. The Labor Department reports the May jobless rate on June 5.
May had 26 selling days, 1 fewer than last year.
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