GM, Ford, Chrysler Sales Fell Less Than Estimates

NOTE: RELATIVELY GOOD NEWS FOR DEALERS & BRANDS.=DP

GM, Ford, Chrysler Sales Fell Less Than Estimates

By Mike Ramsey and Alan Ohnsman

June 2 (Bloomberg) — General Motors Corp., Ford Motor Co. and Chrysler LLC posted U.S. May sales that fell less than analysts’ estimates as shoppers returned to showrooms, while Toyota Motor Corp. and Honda Motor Co. did worse than expected.

U.S. industry sales declined 34 percent from a year earlier, for a 9.9 million annual sales rate, according to Autodata Corp., topping the 9.2 million average estimate of 7 analysts surveyed by Bloomberg.

The results covered a month in which Chrysler operated in court protection after its April 30 bankruptcy, GM counted down to yesterday’s Chapter 11 filing and the Conference Board’s consumer sentiment index jumped by the most in six years, buoying demand.

“There’s no doubt; it’s progress,” said Gary Dilts, senior vice president of research firm J.D. Power & Associates in Troy, Michigan. “If you are going to see some uptick, you want to see it in May, June, July” when sales usually peak.

GM said U.S. deliveries tumbled 30 percent from a year earlier, and Chrysler dropped 47 percent. Ford, the only major U.S. automaker not in bankruptcy, had a 24 percent decline. Toyota City, Japan-based Toyota’s sales plunged 41 percent, and Honda plummeted 42 percent. Nissan Motor Co. fared better than estimates, falling 33 percent.

Analysts expected Detroit-based GM to decline 37 percent, while Ford was projected to be off 29 percent and Chrysler down by 51 percent. Toyota’s drop was estimated to be 40 percent, and Tokyo-based Nissan and Honda were projected to decline 37 percent and 38 percent.

Chrysler Purchases

Chrysler’s sales were better than they might appear, because the Auburn Hills, Michigan-based automaker had virtually no low-margin sales to rental car fleets and improved its market share to customers buying at car dealerships, Dilts said.

The Asian automakers’ declines partially reflect the strong sales from the year-earlier period, when results at Toyota and Honda were buoyed by $4 a gallon gasoline prices, said Jim Hall, an analyst with 2953 Analytics.

“GM, Ford and Chrysler were so depressed last year because of fuel prices, and the Asian makes hadn’t dropped off as much at this point in the year,” said Hall, who is based in Birmingham, Michigan. Honda’s May 2008 U.S. sales represented the company’s highest ever monthly sales.

Asia-based automakers as a group lost U.S. market share for the first time this year as declines for Toyota and Honda surpassed those for GM and Ford. U.S.-based automakers increased their share to 45.9 percent, up 1.4 percentage points, while Asians’ share fell 2.5 points to 45.6 percent, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Improved Traffic

Almost every automaker reported improved traffic and sales compared with April, reflecting a change in direction for the market.

Meanwhile, the sales rate failed to cross 10 million for the fifth-straight month. The rate was 14.2 million in May 2008.

Ford executives cautioned against reading too much into their better-than-expected results.

“It’s like less awful,” Ken Czubay, Ford vice president of sales and marketing, said in a conference call today. “This is still a very fragile industry. This isn’t any time to rejoice. It’s just a slight uptick.”

Sales at Seoul-based Hyundai Motor Co., South Korea’s largest automaker, fell 20 percent to 36,937 vehicles in May, the company said in a statement. Auto-research firm Edmunds.com had predicted a 15 percent decline.

GM sold 191,875 vehicles, down from 272,363 a year earlier. Ford delivered 161,531, down from 213,238; Chrysler sold 79,010, down from 148,747; Toyota sold 152,583 units, compared with 257,406; Honda sold 98,344 compared with 167,997 a year earlier and Nissan sold 67,489 vehicles, down from 100,874.

Ford’s Inventory

Ford, based in Dearborn, Michigan, said its inventory of unsold cars fell to 350,000, which represents a 56-day supply, less than the industry standard of 60 days. Deliveries of gasoline-electric hybrid vehicles totaled 3,906, which Ford said was the company’s best month ever.

While Nissan sales remained down, dealerships handled more customers than a month earlier, said Al Castignetti, U.S. vice president for the automaker.

“It was the best retail sales month for us since August 2008 on a volume basis,” he said.

GM and Chrysler both may have attracted shoppers looking for bargains, dispelling “the notion that consumers will refuse to buy cars from a bankrupt automaker,” Edmunds.com said yesterday in a report.

‘Purchase Intent’

Consumers’ “purchase intent” for Chrysler vehicles rose 72 percent in May compared with April, Edmunds.com said, citing an analysis of traffic on its Web site. For the week ended May 31, a day before GM’s bankruptcy filing, purchase intent for that automaker’s models increased 4 percent, Edmunds.com said.

GM and Chrysler had resisted bankruptcy for months while operating on U.S. aid, saying consumers would shun a company in court protection.

Automakers got a tailwind last month with the increase in consumer confidence as measured by the sentiment index of the New York-based Conference Board. Fewer Americans filed claims for unemployment benefits in the week ended May 23, according to Labor Department figures released May 28.

Still, the recession kept eroding U.S. payrolls, probably sending unemployment past 9 percent for the first time since 1983, according to a Bloomberg survey of 59 economists. The Labor Department reports the May jobless rate on June 5.

Stuttgart, Germany-based Daimler AG’s U.S. sales, including Mercedes-Benz and Smart cars fell 33 percent in May to 16,303. Bayerische Motoren Werke AG, based in Munich, said sales of BMW and Mini vehicles declined 28 percent to 22,993.

Mumbai-based Tata Motors Co.’s Jaguar and Land Rover division fell 29 percent to 3,391. Wolfsburg, Germany-based Volkswagen AG’s sales of its namesake brand declined 12 percent to 19,568.

May had 26 selling days, 1 fewer than last year.

To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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