Japanese join U.S. car sales decline - May skid means production cuts

[Ming]

Japanese join U.S. car sales decline
May skid means production cuts
June 2, 2005
BY SARAH A. WEBSTER and MICHAEL ELLIS
FREE PRESS BUSINESS WRITERS

May was a double-digit downer for several big automakers -- domestic and foreign -- and the continuing weak performance will result in a nationwide reaction to reduce the number of new cars and trucks that have built up on dealer lots this year.

Several local automakers said Wednesday they will cut production in factories through September and offer a variety of new incentive programs to generate sales. One of those efforts, offered by General Motors Corp., will give many consumers the big discounts usually reserved only for employees.

The Detroit-based GM, Dearborn-based Ford Motor Co. and Auburn Hills-based Chrysler Group all announced that sales of their new cars and trucks declined in May compared to the same period a year ago.

But they weren't alone. Japanese automakers Toyota Motor Corp. and Honda Motor Co. also reported that sales were off.

The most noteworthy losses for May, compared to the same month a year ago, were posted by:

•Honda, which was down 14.7% compared with the same month a year ago. Cars such as the Accord and Civic were down substantially, dragging on the overall performance of the company.

•GM, which was down 12.6%. Of the company's eight brands, only Cadillac and Hummer posted sales improvements.

•Ford, which was down 10.6 %. All of the company's six brands posted declines despite some boosts from new products, such as the Ford Mustang sports car.

Most other major automakers posted smaller declines: 2.5% at DaimlerChrysler AG, which includes the local Chrysler Group, and 0.5% at Toyota.

Nissan Motor Co. Ltd., which has been substantially increasing incentives in recent months, was one of the strongest performers of the month, with a sales gain of 6.6%. Despite drops by Toyota and Honda, the Japanese Big Three had 27.7% of the U.S. market in May.

Overall, consumers bought 1.5 million new cars and trucks in the United States last month, an industrywide sales slide of 8% compared with a year ago. Sales were down 8.6% for trucks and a little less, 7.3%, for cars -- a split performance that suggests gas prices could be affecting consumer decisions.

Gary Dilts, senior vice president of sales for the Chrysler Group, which makes Chrysler, Dodge and Jeep vehicles, noted that May this year included two fewer selling days and one less weekend than the same month a year ago -- a factor that may have skewed the year-over-year comparisons.

"We're disappointed but not surprised," he said of the results.

George Pipas, Ford's U.S. sales analysis manager, concluded that May was "a pretty weak month" and notably softer than March and April.

While the Memorial Day weekend at the end of the month resulted in strong sales, he noted, "The consumer appears to have taken a bit of a pause."

GM, though, chose to paint the month as a mostly positive one.

Paul Ballew, GM's executive director of global market and industry analysis, while saying that GM is "never pleased with a sales decline," characterized industry sales as "pretty close to expectations." At one point, he called the month solid.

He then went on to elaborate on a sweeping national incentive program that GM will offer through July 5, which will bring the employee discounts on new cars and trucks that are well-known, and coveted, in Detroit, to consumers nationwide.

In Detroit, where car advertisements usually distinguish payments for automakers' employees and everyone else, it's evident how big the savings can be.

For example, GM spokeswoman Deborah Silverman said that on a GMC Envoy midsize SUV equipped with popular options, the price under the discount program would be $23,219, compared with a manufacturer's suggested retail price of $29,210.

Full Article Here: http://www.freep.com/money/autonews/...e_20050602.htm

[mrfunji]

GM down 12.6%??? Didn't they report (and confirmed on C&G) a YTD decline of 6.9%? Now the hometown media is even gunning for Detroit's throat

[zaxxis]

Where did they get these numbers?

According the AP, here is where everyone stands right now. http://biz.yahoo.com/ap/050601/auto_...able.html?.v=2

Also, they fail to mention that there were 2 more selling days last May than there was this may, so you have to adjust the numbers.

Z

[IMPALAon20s]

Originally Posted by mrfunji

GM down 12.6%??? Didn't they report (and confirmed on C&G) a YTD decline of 6.9%? Now the hometown media is even gunning for Detroit's throat

that article is for may sales in 05 compared to may sales in 04, not YTD.

[Family Man]

What's going on here???

In another thread (GMI Gives Teaders the Facts), the following was posted:

Industry Sales Numbers: Presented to you by GMInsidenews!

May 2005 Sales

General Motors
MTD -4.7% (393,197)
YTD -6.3% (1,794,278)

This comes right from GM's press release, comparing May 2004 with May 2005. So where does the decrease of 12.6% come from? What are the facts?

Also, Cadillac and Hummer were note the only divisions to report increases. Saab sales increased by 7.6%, while Isuzu(?!) sales increased by 6.9%.

[hc_earwicker]

Originally Posted by Family Man

What's going on here???

In another thread (GMI Gives Teaders the Facts), the following was posted:



This comes right from GM's press release, comparing May 2004 with May 2005. So where does the decrease of 12.6% come from? What are the facts?

Also, Cadillac and Hummer were note the only divisions to report increases. Saab sales increased by 7.6%, while Isuzu(?!) sales increased by 6.9%.

There are two numbers that are quoted and often end up getting used interchangably when they shouldn't be. One is the the percentage change in sales this month as compared to the same month last year. The other is the percentage change in the "daily sales rate" for the month. You get the daily sales rate by dividing the total sales for the month by the number of selling days. May '05 had 24 selling days as opposed to 26 in May '04.

Here is an incomplete list giving both figures for each manufacturer.

In the following order the numbers are, Sales in May '05, Sales in May '04, Change in total sales, change in daily sales rate.

GM: 386688, 442668, -12.6, -5.4
Ford: 283994, 317471, -10.5, -3.1
Nissan: 93519, 87713, +6.6, +15.5
Toyota: 201493, 202420, -0.5, +7.8
Honda: 122169, 143193, -14.7, -7.6.
DCX: 232,386, 238,272, -2.5, +5.7
Hyundai+Kia: 65919, 65780, +0.2, +8.6
Mazda: 26657, 27548, -3.2, +4.8
BMW: 26926, 27787, -3.1, +4.9

- HCE

[Ming]

Originally Posted by Family Man

What's going on here???

In another thread (GMI Gives Teaders the Facts), the following was posted:



This comes right from GM's press release, comparing May 2004 with May 2005. So where does the decrease of 12.6% come from? What are the facts?

Also, Cadillac and Hummer were note the only divisions to report increases. Saab sales increased by 7.6%, while Isuzu(?!) sales increased by 6.9%.

You have 3 possible numbers:

Year to date (Total increase for this year up to this month vs. last years total up to May)
Month to Month (April vs. May)
This May vs. Last year's May aka: "compared with the same month a year ago"

The last one is not as useful, because if GM had a really good May last year, then the numbers might look worse than they really are. On the flip side, a small company like Suzuki would crow about its This May vs. Last May sales because they would probably be even more impressive gains there than month to month or year to date "Best May sales Ever!" - although generally the YTD number gives a better picture if you are doing a vs. a year ago study, I'd think.

[tgagneguam]

Originally Posted by hc_earwicker

There are two numbers that are quoted and often end up getting used interchangably when they shouldn't be. One is the the percentage change in sales this month as compared to the same month last year. The other is the percentage change in the "daily sales rate" for the month. You get the daily sales rate by dividing the total sales for the month by the number of selling days. May '05 had 24 selling days as opposed to 26 in May '04.

Here is an incomplete list giving both figures for each manufacturer.

In the following order the numbers are, Sales in May '05, Sales in May '04, Change in total sales, change in daily sales rate.

GM: 386688, 442668, -12.6, -5.4
Ford: 283994, 317471, -10.5, -3.1
Nissan: 93519, 87713, +6.6, +15.5
Toyota: 201493, 202420, -0.5, +7.8
Honda: 122169, 143193, -14.7, -7.6.
DCX: 232,386, 238,272, -2.5, +5.7
Hyundai+Kia: 65919, 65780, +0.2, +8.6
Mazda: 26657, 27548, -3.2, +4.8
BMW: 26926, 27787, -3.1, +4.9

- HCE

Exactly, hc_earwicker, and you'll find that reporters will use either one to prove their points - i.e., to accentuate poor sales at GM and Ford or better sales at foreign firms. A good understanding of how they cooked the data lends for a clearer idea of everyone's performance.

[RWD60]

yeah, this article is overall, not daily rates. and surprisingly, with 2 fewer days to sell in everyone but Nissan and Hyundai lost sales... all this does is show how strong those two are, not how weak anyone else is. GM lost either way though, so we really can't say to much, at least in this version Toyota's going down too

[goblue]

Originally Posted by RWD60

GM lost either way though, so we really can't say to much, at least in this version Toyota's going down too

Yes, but so did Honda, by more than GM on a percentage basis on both formulas. There are simply too many good options in the class for Honda's two best selling vehicles - Civic and Accord. Now, Honda is reacting by making the new vehicles more polarizing and less mainstream, but not so polarizing as to pull a 300 or stang performance. I predict their new replacements won't equal the sales of their predecessors the year they were released.

Toyota reaps the benefit of this strategy. There's still a huge market for automotive appliances with the styling of an Amana range chopped with a GE dishwasher.

[GM-10]

I can't say I'm real sad to see that Honda is having some problems. They have gotten WAY to conservative.