Toyota Motor Corp. (7203) and Honda (7267) Motor Co. led five of the six largest automakers in reporting U.S. sales gains in May that trailed estimates as slumping job growth limited their rebound from last year’s earthquake and tsunami.
Toyota deliveries last month surged 87 percent to 202,973 and Honda sales climbed 48 percent to 133,997, according to company statements. The Japan-based automakers, rebounding from the natural disasters that curtailed production and slashed inventories, missed analysts’ estimates for gains of 93 percent and 53 percent, respectively. General Motors Co. (GM:US), Chrysler Group LLC and Nissan Motor Co. sales also trailed estimates.
U.S. light-vehicle sales ran at a 13.8 million seasonally adjusted annualized rate, according to an e-mailed statement by Autodata Corp. The pace missed the 14.4 million average estimate of 14 analysts surveyed by Bloomberg and slid below 14 million for the first time this year. Employers in May added the fewest workers in a year, according to the Labor Department.
“There’s a fairly consistent story that the U.S. recovery is slogging it out, inching forward but still restrained,” Paul Ballew, chief economist at Dun & Bradstreet in Short Hills, New Jersey, said in a phone interview yesterday. “That’s what shows up in auto sales, consumer spending and employment growth. While we want the recovery to sprint ahead, it’s just the messiest one in history because of housing, fiscal-policy issues and Europe being on its back.”
GM deliveries last month rose 11 percent to 245,256, according to a statement. Chrysler’s sales climbed 30 percent to 150,041, and Nissan’s increased 21 percent to 91,794. Analysts estimated gains of 15 percent by GM, 40 percent by Chrysler, and 29 percent by Nissan.
Ford Motor Co., the only major automaker whose sales gain exceeded estimates, boosted incentives in May. Chrysler offered some buyers no monthly payments for 90 days and GM discounted some models to try to offset market-share recovery by Japanese automakers, Peter Nesvold, a New York-based analyst for Jefferies & Co., said in a May 31 research note.
“We’re a little bit disappointed that some of the incentive offers didn’t drive sales a little bit beyond what they did,” Alec Gutierrez, an analyst for Kelley Blue Book in Irvine, California, said in a phone interview.
Ford (F:US) deliveries last month rose 13 percent to 215,699 cars and light trucks, according to a statement. The Dearborn, Michigan-based automaker beat the 12 percent gain that was the average estimate of 10 analysts. Sales of the Mustang sports car surged 58 percent to 10,427, helped by deliveries to fleets.
GM offered “substantial” increases in rebates for pickups and sport-utility vehicles, while Ford boosted discounts on models such as Fiesta and Focus cars, Escape SUVs and large F- Series pickups, Jefferies’s Nesvold wrote. Chrysler’s national promotion offering some buyers to skip three monthly payments ran during the last 10 days of May.
Manufacturing employment accounted for 12,000 of the 69,000 new workers added last month, according to the Labor Department. Hyundai Motor Co. (005380) has drawn almost 20,000 applicants for 877 openings at its Montgomery, Alabama, factory that is adding Sonata and Elantra sedan output later this year, Robert Burns, a company spokesman, said in an e-mail.
The U.S. jobs report “is very disappointing,” Sue Yingzi Su, a senior economist for GM, said yesterday on a conference call. A “softer patch” for payrolls may continue into next month as “payback” from strength in the job market from January through February, she said.
GM fell 0.9 percent to $22.01 at the close in New York. Ford dropped 4.2 percent to $10.12. The Dow Jones Industrial Average erased its 2012 gain, falling 2.2 percent yesterday.
GM briefly erased its decline for the day after saying it aims to cut its pension obligation by almost a fifth by offering lump-sum payments to about 42,000 salaried retirees and shifting plans to a Prudential Financial Inc. unit. The moves will eliminate about $26 billion from GM’s pension obligations, which totaled $134 billion at the end of 2011.
Total light-vehicle deliveries in May rose 26 percent to 1.33 million, missing nine analysts’ average estimate for a 31 percent increase. The May 2011 industry sales rate was 11.7 million, according to Woodcliff Lake, New Jersey-based Autodata.
Chrysler, ranked fourth in U.S. light-vehicle sales this year, began production in May of the Dodge Dart compact and starts shipping the car to dealers this month. Deliveries of the Caliber, which Dart replaces, fell 66 percent to 1,341.
“The Japanese competitors are now back fully in the marketplace,” Sergio Marchionne, chief executive officer of Auburn Hills, Michigan-based Chrysler and its majority owner Fiat SpA (F), told reporters on May 24. “It’s something that we have not had to deal with, effectively, over the last 12 months.”
GM said deliveries of the Cruze compact, which benefited from tight supply of Toyota’s Corolla and Honda’s Civic a year ago, slipped 14 percent to 19,613. The Detroit-based automaker shuffled its sales team on May 17, naming Alan Batey to the new position of vice president of U.S. sales and service. GM’s U.S.- leading market share through May slipped 2 percentage points from a year earlier to 17.8 percent, according to Autodata.
“There has been, I would say, some modestly renewed aggressiveness” on pricing and incentives as Japan-based automakers’ supply improves, Don Johnson, GM’s U.S. vice president of sales operations, said yesterday on the company’s conference call. “We still expect for the industry to maintain some pretty good discipline.”
Ford raised incentives by about $100 per vehicle in May from April, said Erich Merkle, the company’s sales analyst. Most of the increase came from bigger discounts on the outgoing 2012 Escape SUV, which is being replaced by an redesigned version now arriving in showrooms, said Ken Czubay, Ford’s U.S. sales chief. Escape sales still slid 0.3 percent to 23,077.
Toyota, No. 3 in U.S. vehicle sales, led the industry with its gain, reported in a statement on its website. The Toyota City, Japan-based carmaker said that sales of a new Camry sedan more than doubled to 39,571 and its Prius line of hybrids more than tripled to 21,477. Toyota lost market share in May 2011, two months after Japan’s tsunami disrupted vehicle output and led to shortages through much of last year.
Honda, based in Tokyo, entered May having reported year- over-year sales declines in 10 of the last 12 months, as the tsunami and Thai floods later in 2011 sapped supply of Civic compacts, Accord sedans and CR-V SUVs. Civic deliveries surged 83 percent to 33,490, Accord gained 75 percent to 29,737 and CR- V increased 54 percent to 25,186.
Nissan, which began production this month of its revamped Altima sedan, said deliveries of the model fell 11 percent to 22,690.
“It was a really anemic first half of the month,” said Al Castignetti, vice president of U.S. sales for Yokohama, Japan- based Nissan. “The second half of the month really made it for us.”
South Korea’s Hyundai and Kia Motors Corp. (000270) combined to sell 11 percent more vehicles than a year earlier, trailing the 17 percent average of six analysts’ estimates. Hyundai’s deliveries slipped 5.6 percent for Elantra small cars and 8.7 percent for Sonata midsize sedans, while sales of Kia Sorento SUVs declined 7.2 percent.
Volkswagen AG (VOW) increased combined sales of its namesake and Audi brand vehicles by 24 percent in May, missing the 33 percent average of four analysts’ estimates. Deliveries of the compact Jetta model dropped 9 percent to 15,175.
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