May Car Sales: Ever-So-Small Hint of Hope

By Michelle Krebs May 29, 2009

SANTA MONICA, Calif. -- May car sales, due to be reported by auto manufacturer Tuesday, remain off by double-digits from last year, but the sales increase from April to May is in line with typical April-May seasonal bumps and the drop from a year ago is largely due to lower fleet sales, according to Edmunds.com's forecast.

For May, manufacturers are expected to report new vehicle sales -- retail and fleet -- of 890,000 units, a 36.1 percent decrease from the 1.4 million sold in May 2008 but an 8.9 percent increase from the 817,000 sold in April. A typical seasonal increase between April and May is a 9 percent rise. When adjusted for this difference in the number of selling days in May versus a year ago, sales decreased 33.6 percent.

That would put the Seasonally Adjusted Annualized Rate at about 9.5 million vehicles, up from 9.3 million in April.

"The dramatic year-over-year declines can largely be attributed to significant reductions in fleet sales," said Jesse Toprak, Edmunds.com's executive director of Industry Analysis. "This is particularly true for Chrysler, since the company closed down production during the bankruptcy period."

The interesting horserace to watch when May sales are reported will be the one between Ford and Toyota. Edmunds.com forecasts them to sell the same number of vehicles, putting them in a dead heat for the No. 2 spot, which Ford took in April.

"Ford took the No. 2 spot in April but May is a closer call," said Toprak.
 
For May, the combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 43.9 percent, down from 45.3 percent in May 2008 and down from 46.6 percent in April.

On a company-by-company basis, Edmunds.com predicts:

GM, which is expected to file Chapter 11 bankruptcy on Monday, will sell 170,000 units, down 36.9 percent compared to May 2008 and down 1.3 percent from April. GM's market share is expected to be 19.1 percent, down from 19.4 percent in May 2008 and down from 21.1 percent in April 2009. Edmunds.com forecasts that GM booked a significant number of fleet sales in May -- about 50,000 units.

Ford will show the lowest year-to-year decline in sales of the traditional Big 6. Ford will sell 153,000 units, down 28.5 percent compared to May 2008 and up 15.5 percent from April. This would result in a new-car market share of 17.2 percent, up from 15.3 percent in May 2008 and up from 16.2 percent in April 2009.

Chrysler will sell 68,000 units, down 53.9 percent compared to May 2008 and down 10.6 percent from April. This would result in a new car market share of 7.7 percent, down from 10.7 percent in May 2008 and down from 9.3 percent in April 2009.

Of the Big 7, Chrysler is expected to show the biggest sales decline. The automaker shutdown vehicle production shortly after filing for Chapter 11 bankruptcy on April 30. As a result, it had an unusually low number of fleet sales -- 5,000 versus the usual 30,000.
Chrysler shut down all of its factories after filing for Chapter 11
 
Toyota will sell 153,000 units, down 40.6 percent from May 2008 and up 20.8 percent from April. Toyota is expected to be the biggest market share gainer in May. Edmunds.com forecasts its May market share at 17.2 percent, down from 18.5 percent in May 2008 and up from 15.5 percent in April 2009.

Honda will sell 102,000 units, down 39.3 percent from May 2008 and up 1 percent from April. Honda's market share is expected to be 11.5 percent, down from 12.1 percent in May 2008 and down from 12.4 percent in April. Honda sales are down largely because last May it had such a successful month. A year ago May, gas prices were at $3.60 plus a gallon, prompting Honda Civic sales to soar to 50,000 units in the month.

Nissan will sell 65,000 units, down 35.1 percent from May 2008 and up 38.7 percent from April. Nissan's market share is expected to be 7.4 percent, up slightly from 7.2 percent in May 2008 and up from 5.8 percent in April. Nissan sales are believed to be down largely due to slumping retail sales; Nissan increased the number of vehicles it sold to fleets in May, Edmunds.com estimates.

Hyundai (including Kia) will show the lowest year-to-year decline in sales of the Big 7. It will sell 63,000 units, down 18.4 percent from May 2008 and up 6.2 percent from April. Throughout the recession, Hyundai and Kia have enjoyed relatively strong sales due largely to their image as value sellers, Edmunds.com surmises. In addition, Hyundai's Assurance Program, which allows the turnback of vehicles if buyers lose their jobs and has since been copied and embellished by other automakers, has resonated with consumers.

Hyundai's market share is expected to be 7.1 percent, up from 5.6 percent in May 2008 and down from 7.3 percent in April. Hyundai's share will dip back below Nissan's; Hyundai's share was higher than Nissan's in April.

 

 

Change from May 2008

(Adjusted for fewer selling days)

Change from May 2008

(Unadjusted for fewer selling days)

Change from April 2009

(Unadjusted for fewer selling days)

Chrysler (Chrysler, Dodge, Jeep)

-52.2%

-53.9%

-10.6%

Ford (Ford, Lincoln, Mercury, Volvo)

-25.8%

-28.5%

15.5%

GM (Buick, Cadillac, Chevrolet,
GMC, Hummer, Pontiac, Saab, Saturn)

-34.5%

-36.9%

-1.3%

Honda (Acura, Honda)

-36.9%

-39.3%

1.0%

Hyundai (Hyundai, Kia)

-15.2%

-18.4%

6.2%

Nissan (Infiniti, Nissan)

-32.6%

-35.1%

38.7%

Toyota (Lexus, Scion, Toyota)

-38.3%

-40.6%

20.8%

Industry Total

-33.6%

-36.1%

8.9%

Source: Edmunds.com

May had 26 selling days, one less than last May 2008.

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