Things had been on a positive trajectory for all of 2011 (and even into last year), but the auto industry hit an air pocket in May. After seven months of year-over-year increases, total industry volume fell by 4% compared to last May. The overall market slowed to an 11.8-million-unit annual pace, which is the first sub-12-million number we’ve seen since August.
Japanese automakers can blame some of the drop on supply shortages due to the disaster in Japan. And some of them exacerbated the situation by cutting back dramatically on marketing and incentives in order to preserve inventory, a strategy that worked too well, and kept shoppers away. Taking a cue from Toyota and Honda, other automakers followed suit, which resulted in May’s overall incentive spending being the lowest in years. All three domestic automakers spent less compared to last year but the domestics still spend more than the industry average — particularly GM and Chrysler. By the end of the month, incentives were trending up again but the damage was done.
Additionally, gas prices vaulted over $4 a gallon, which finally put the brakes on sales of big pickups and SUVs, hurting GM and Ford (but, strangely, not Chrysler). Finally, the overall economy sputtered, as job creation stalled and growth slowed dramatically, adding to consumer jitters.
May’s results were wildly out of whack (Chrysler outsold both Honda and Toyota; none of the usual sedan subjects — Camry, Accord, Corolla, and Civic — made the Top 10 bestseller list). This is too weird to last. The Japanese supply situation will work itself out (with improvement expected as soon as June), and incentive spending will normalize. But the overall economy may continue to struggle and gas prices, although now mitigating, remain a wild card. The climb up to this year’s hoped-for 13-million-unit sales level could easily hit some more unforeseen turbulence.
SALES RESULTS FOR APRIL 2011, AND PERCENT CHANGE VERSUS APRIL 2010
GENERAL MOTORS +0%
Rising gas prices were clearly evident in GM’s May results, which saw trucks decline and cars advance. (The small overall decline that’s been reported elsewhere reflects the loss of sales from GM’s dropped nameplates.) The company claimed that retail sales actually rose, but fleet sales still comprised nearly 1/3 of GM’s total.
The Silverado dropped by 16% (paralleling the decline for Ford’s F-series), and the Traverse (-38%) and Tahoe (-37%) fell back as well, reflecting weakness in the truck market. Only the compact Equinox (+34%) looked really good. Things were much better on the car side, where the Cruze is running about 50% ahead of the Cobalt (and far better than that if you count only retail sales). The Malibu emerged as the bestselling passenger car — although the Malibu’s increase (+18%) doesn’t look quite as good (+3%) if you subtract fleet sales. Overall, though, Chevy’s retail sales in May were higher than the year prior.
Buick has grown its sales by adding the Regal to its lineup. All existing Buick models declined in May. The Regal has just about caught up with the Enclave and looks like it could then overtake the LaCrosse to become Buick’s bestselling car.
Cadillac was down overall, but as at Chevrolet, retail sales did increase. The CTS (+23%) did well but the SRX (-4%) took a breather. Given the weakness in large trucks/SUVs, it’s not surprising that the Escalades declined.
Although the Sierra pickup (-5%) couldn’t defy the big-pickup downtrend, GMC managed to stay in the black thanks to the Terrain (+42%) and the Acadia (+19%), with an assist on the commercial side from its big vans (+89%).
FORD MOTOR COMPANY +5% (Ford and Lincoln only)
Factor in the loss of Mercury and Volvo, and Ford Motor Company totals were down a bit in May. Lincoln continues to struggle but thanks to the popular new Focus, Fiesta, and Explorer, Ford division was able to overcome a slowdown in the truck market.
Slowing F-series sales (-15%) dealt Ford a blow but the new Explorer (+135%) was undaunted by higher fuel prices. Those same fuel prices probably gave a boost to the Focus, which is looking very strong. The addition of the Fiesta, which outsold the faltering Mustang and the Taurus in May, also helped keep Ford in positive territory.
The bad news continues for the MKS (-42%) and the MKT (-44%), but the smaller MKZ (+24%) again did well.
CHRYSLER GROUP +10%
Nothing says more about the through-the-looking-glass quality of May’s results than the fact that Chrysler outsold Toyota and Honda. It was as if the company had turned back the clock a couple decades, as it stood in third place behind GM and Ford. Chrysler’s total figures grew by 10% but retail sales rose even faster, and incentive spending declined dramatically (although it’s still higher than the industry average).
Those who doubt the power of the Imported from Detroit ad campaign should take a gander at the results for the Chrysler 200, which in May was the brand’s bestselling car, more than doubling the previous year’s sales of the Sebring. The 300 declined (-28%), although the company claimed supplies were tight due to the model changeover. The Town & Country’s drop-off (-51%) looks more worrisome. Quick! Get Eminem into a minivan!
Without the addition of the Durango, Dodge’s overall total decline would have been greater than 5%, as most Dodge models were off in May. The two exceptions were the Nitro (+7%) and the Grand Caravan, which was flat.
Jeep was really the engine of growth for Chrysler in May, with the Grand Cherokee leading the way, nearly tripling year-ago sales. The Wrangler, however, managed to beat it in total volume. All Jeep models bested their year-ago totals. After the Grand Cherokee, the revamped Compass (+92%) was the biggest gainer.
The big Ram pickup (+16%) defied the downturn in the truck market.
Fiat doubled sales of the 500 compared to last month.
TOYOTA MOTOR SALES -33%
As bad as May was for Toyota, it would have been a lot worse had the automaker not reversed course and ramped up its marketing and incentive spending at the end of the month. As it was, Toyota was just barely able to hold off the Koreans — by less than 1000 units. The good news is that supplies will start to recover in June, and should increase from there — marketing is already bouncing back.
After last year’s recall disaster, May was a new nightmare scenario for Toyota. Both the Camry (-36%) and the Corolla (-37%) found themselves off of the Top Ten Bestsellers list. The Camry was passed by three different midsize competitors: the Chevy Malibu, the Ford Fusion, and the Nissan Altima. The Prius and the Tundra fell by half. Only one Toyota, the Tacoma, was up over last year (+5%).
Hobbled by supply shortages and an aging lineup, Lexus is now probably out of the running to challenge BMW and Mercedes-Benz for the title of bestselling luxury brand this year, for the first time in over a decade. All Lexus models were off by 1/3 or more. The worst was the HS (-84%) and the GS (-60%).
The new tC coupe was still able to double the weak sales of a year ago, but the other two models declined.
HYUNDAI – KIA +34%
Is anyone surprised that the Koreans saw the disaster in Japan as an opportunity to seize even more U.S. market share? Probably not. Of course, it helps that they’ve recently introduced several hot new products.
Hyundai could boast that the Sonata (+7%) outsold the weakened Camry and Accord, but since the Malibu and the Fusion did too, it seems like less of an accomplishment. More impressive was that the new Elantra doubled its sales.
The new Optima tripled year-ago volume, but it alone did not power Kia to a 53% gain. Credit also the Sportage (+98%), the Soul (+82%), and the Sorento (+46%).
AMERICAN HONDA -23%
The Japanese disaster hit Honda almost as hard as Toyota. As a result, Honda got passed by Chrysler and the Koreans, and both the Civic and the Accord fell out of the Top Ten. Honda said it will be back up to full production capacity for all models by August.
The Accord (-40%) and the new Civic (-36%) suffered in May, as did the CR-V (-9%), although all were coming off very good year-prior totals. It wasn’t all bad news for Honda, though, as the Fit (+35%), at least, managed to post a gain.
All Acura models were in negative territory. The MDX (-6%) was the strongest, while the weakest models were — that’s right — the RL (-62%) and the ZDX (-58%).
NISSAN NORTH AMERICA -9%
Nissan’s decline was mitigated by the Altima’s strong performance (+16%), as it muscled into fourth place among all nameplates. The Frontier (+25%) also was in positive territory and the Juke and the Leaf added a few thousand units. Leaf deliveries doubled versus April. Otherwise, it was mostly all downhill for the rest of the lineup, particularly the Versa (-51%) and the Titan (-44%).
With all of its cars made in Japan, Infiniti was more greatly affected by the trouble there than was Nissan. All models were down except for the mighty QX (+11%).
VOLKSWAGEN GROUP +24%
The Group that would rule the automotive world came a bit closer to its hubristic goals in May, with all three brands contributing.
The Jetta continues to do well (+59%), and in May was joined by the CC (+50%), the Tiguan (+58%, ahead of a redesign), and the Touareg (+107%). Note that VW showrooms are at the moment without the Beetle or the Passat.
Audi had a very good month thanks to the addition of the A7 and the renewed A8.
The new Continental GT has given Bentley a boost.
BMW GROUP +20%
BMW looked the best of the luxury players this month. Credit the new X3 (which tripled the sales of the old model), the 5-series (+84%), and the 7-series (+122%). Even some of the marginal players like the Z4 (+51%), the 6-series (+64%), and the X6 (+22%) kicked in to help. The 3-series (-16%) and the 1-series (-51%) did not.
The Mini’s sales increase was all due to the Countryman.
Rolls-Royce increased its sales by 1 car.
On the car side, it was the E-class, and only the E-class, that looked good (+5%). Things were much better among the trucks/SUVs, where all models posted gains except the soon-to-be-replaced M-class. The biggest jumps came in the unlikeliest places: the Sprinter (+126%) and the R-class, which nearly tripled.
Roger Penske is looking pretty smart for unloading Smart.
Maybach sales declined from 5, to 4.
SUBARU OF AMERICA -15%
Subaru suffered a rare year-over-year sales decline in May. The Japanese-sourced Forester (-35%) and Impreza (-39%) were down, which the company blamed on lack of inventory. Meanwhile, the U.S.-made Outback (+11%) and Legacy (+1%) enjoyed their best May ever.
Weakness in mainstream offerings like the Mazda3 (-24%) and the Mazda6 (-53%) hurt Mazda in May, despite the addition of the Mazda2. Mazda’s crossovers, the CX-7 (-22%) and the CX-9 (-29%) also took a breather last month, but the Mazda5 increased (14%).
After doubling sales in April, Mitsubishi enjoyed another big increase last month. Sure, there’s the addition of the Outlander Sport (which is now handily outselling the regular Outlander), but there were also suspiciously large jumps for the Galant (+166%) and a rather absurd 9-fold increase in sales of the Eclipse Spyder.
Once again, the new S60 — which has become Volvo’s bestselling vehicle — drove home a big increase for the Chinese-owned Swedish automaker. The XC60 also posted a nice gain (+43%), while the other models were largely unchanged.
JAGUAR LAND ROVER +13%
May was essentially a repeat of April for Jaguar, with the XJ in the top spot, and the XF and the XK slipping somewhat but the brand still moving forward overall.
Land Rover +13%
Like Jaguar, Land Rover didn’t see a big change from April to May. Again, the LR2 dropped but the other three models increased slightly. The vehicle that has a chance to really increase volume for Land Rover, the Evoque, is still some months away.
The Cayenne continues to zoom ahead, and is now outpacing the Panamera 2 to 1. The aging Boxster (-43%) and Cayman (-28%) both declined but the 911 scratched out a gain (+14%)
After recording another monthly sales increase, one wonders if Suzuki could at last be gaining some traction. The SX4 (+26%), the Kizashi (+31%), and even the Equator (+28%) all were up. Only the Grand Vitara was flat.
Far away from Japan, Saab endured its own calamity this month, with its factory shut down due to a cash-flow crisis. At the moment, it appears to be resolved, but it can’t have done anything good for buyer confidence. Nonetheless, Saab was able to notch some gains over the anemic levels of a year ago — with the 9-4X not yet in the mix.
TOP 5 BESTSELLING NAMEPLATES in April (and rank last month)
1. Ford F-series 42,399 (#1)
2. Chevy Silverado 28,409 (#4)
3. Chevrolet Malibu 25,600 (#7)
4. Nissan Altima 25,525 (#17)
5. Ford Fusion 24,666 (#13)
6. Ford Escape 23,140
7. Hyundai Sonata 22,754
8. Chevrolet Cruze 22,711
9. Ford Focus 22,303
10. Dodge Ram 20,117
Toyota Camry 18,830
Honda Accord 18,185
Honda Civic 18,341