As gas prices climbed almost daily throughout February, media hysteria suggested the price at the pump could soar to an all-time high in May to as much as $5 per gallon in some cities. That didn't happen. In fact, quite the opposite has happened. Gas prices actually began falling in April. AAA calculated the national average for regular gas at $3.55 a gallon in May, down from about $4.11 a gallon in February, matching the record high of July 2008.
Still, May saw consumers let up on the accelerator pedal in terms of buying smaller more fuel-efficient vehicles only a bit. Sale of midsize, compact and subcompact cars combined accounted for 39.8 percent of all U.S. vehicle sales; that compares with 41.1 percent in February. One auto company executive noted in his May sales call that, while gas prices have been declining, buyers still believe they will increase over the long term and so fuel-efficiency remains a top priority in their vehicle choice.
The midsize car segment continues to show strength. Its share of the total U.S. vehicle market stood at 18.5 percent in May, making it once again the highest-volume vehicle segment after having months ago surpassed the compact segment for the top spot. That share number is up from 17.2 percent a year ago though off from April's 19.2 percent.
A number of factors are at play in the strength of the midsize car segment. A surge in midsize car sales is typical during periods of gas price spikes as occurred earlier this year. It's an attractive category to buyers with fuel efficiency in mind. If buyers downsize from a larger car or sport utility, they give up little with a midsize car in the way of amenities but they gain in fuel economy. A move up from a subcompact or compact provides the buyer with more room without a huge jump in price or fuel economy.
Another factor in May was that the Japanese automakers, having been clobbered with product shortages last year due to the earthquake and tsunami, roared back. The Toyota Camry and Honda Accord were back on top of the midsize car segment in May by a wide margin. The Camry surged to 39,751 sales in May, compared with 18,830 in the year-ago May. Honda Accord sales soared to 29,737 units this May compared with 17,018 cars last May. The Chevrolet Malibu and Ford Fusion had incremental sales increases this May versus last. Kia Optima sales shot up to 13,364 units, compared to only 7,431 a year ago. The Volkswagen Passat surpassed the 10,000-sales mark for the third month in a row, selling 10,178 units in May, to be precise. The Nissan Altima, in sell-down mode, and capacity-constrained Hyundai Sonata Posted sales decreases.
The midsize car segment is going to become even more intriguing as the year marches on. By the time 2012 ends, almost every major player in the midsize car segment will have undergone a major redesign within a year or so. Already the revamped Camry is out. The up-and-coming, U.S.-built Volkswagen Passat hit the market last year. The fuel-efficient Eco version of the revamped Chevy Malibu will be followed by other editions this summer. The 2013 Nissan Altima goes on sale late this month. The 2013 Honda Accord and ultra-stylish 2013 Ford Fusion hit the market this fall. The Kia Optima was redesigned in 2011; the Hyundai Sonata in 2010. A single new entry in a segment often generates consumer interest in the entire segment, but this year's combination of sell-down of old and launch of several new models will be particularly fascinating.
The return of the Japanese theme also played out in May in the compact segment, which accounted for 16.4 percent of all vehicles sold in the U.S. Once again, the recently redesigned Honda Civic and Toyota Corolla took top billing, in that order. Honda sold a hefty 33,490 units of the Civic, a huge increase from the mere 18,341 it sold last May. Similarly, Toyota sold 31, 847 units of Corolla, up from 16,985 a year ago. The Ford Focus continued its march to higher sales, with 24,769 sold, up from 22,303 a year ago. The Civic, Corolla and, to a lesser degree, the Focus nibbled into the sales of the Chevrolet Cruze, the capacity-constrained Hyundai Elantra, and Volkswagen Jetta and the aged Nissan Sentra.
Interestingly, the subcompact segment, which accounted for 5 percent of all vehicles sold in the U.S. in May, is no longer dominated by Japanese makes, even with their full return to the market. The Michigan-built Chevrolet Sonic, which replaced the Korean-imported Aveo, has skyrocketed to the top spot with sales coming in at 7,205 units in May. The re-made Hyundai Accent captured the No. 2 spot with 6,166 units sold in May. Even the Ford Fiesta, which has struggled to gain traction, came in at third with 6,080 units sold. The Fiat 500, does appear to be gaining some momentum, selling 4,003 units in May, more than double a year earlier. The Honda Fit and freshened Toyota Yaris came in fourth and fifth, respectively, with sales under the 4,000-unit mark for the month, a 35-percent decline for the Fit though a healthy increase for the Yaris.
Like the midsize and compact car segments, the story line of May's compact SUV sales, which accounted for 9.9 percent of all sales, also was the return of the Japanese, at least in part. The Honda CR-V, which went on sale in redesigned form in December 2011, soared back to the No. 1 spot to 15,286 sales, compared with 16,307 a year ago. The Toyota RAV 4 came in third with 19,249 sales, about twice as many as last May. And the Nissan Rogue scored 11,977 units of sales, up from 6,952 vehicles a year ago. But the segment's story goes beyond the return of the Japanese. It's also seeing a sizzling battle brewing between the CR-V and the Ford Escape, in its more stylish 2013 garb on sale this month.
While the Toyota and Honda entries made a comeback in May, the midsize SUV segment, which accounted for 6.7 percent of all U.S. vehicle sales in May, continued to be dominated by Detroit iron. The Chevrolet Equinox topped all competitors with sales that hit 20,238 units. Sales of the Ford Explorer and Ford Edge climbed. The Jeep Grand Cherokee saw a hefty bump in sales. The Detroit gains came despite the Toyota Highlander having substantially higher sales and the Honda Pilot seeing a decent sales hike.
All ships rose in the minivan category in May – spring is usually their strongest selling season though their share of the total market is a small 4 percent. The return of the Japanese caused the rankings to shift. The Toyota Sienna came roaring back in May, taking the No. 1 minivan spot, beating the Dodge Grand Caravan. Honda Odyssey sales also climbed back, easily surpassing the Chrysler Town & Country as it did last year as well. Chrysler plans to drop the Town & Country in the future and replace it with a crossover-type vehicle.
May was also a big pickup truck month, with every major maker enjoying a significant year-over-year sales increase. The large truck market accounted for 10.7 percent of all May vehicle sales.