Ford still can't get it right. R.I.P. Ford under Bill Ford's "leadership"
Ford sales fell 6.9 percent in May
Buoyed by a surge in demand for cars, crossovers and fuel-sipping
hybrids, U.S. auto sales jumped 5 percent in May, making for a solid
month for most automakers.
The uptick in vehicle sales came despite weak economic growth and
ongoing erosion in the housing sector. But sky-high gas prices and the
lure of new models like the car-based GMC Acadia and Ford Edge
crossovers combined to increase the popularity of more fuel-efficient
cars and crossovers.
Car sales were up 6.1 percent in the month, while truck sales, which
include most crossover models, rose 3.9 percent.
Not every automaker benefited from the higher industry sales. Struggling
Ford Motor Co., which earlier this week was promising its first monthly
retail sales gain in more than half a year, instead saw its sales slip
further as consumers abandoned its bread-and-butter F-series pickups for
newer offerings such as General Motors Corp.'s Silverado and Toyota
Motor Corp.'s Tundra pickup.
Ford sales fell 6.9 percent in May, leaving the automaker with 16.5
percent of the U.S. market.
Despite the decline, George Pipas, manager of sales analysis and
reporting, said Ford is on track to stabilize its decade-long slide in
"Our retail share in the past few months appears to have reached a
consistent level," he said. "If we can keep that up for the rest of the
year, then we will hit our retail sales objective that's implicit in the
Way Forward plan."
For the rest of the six biggest automakers, May provided some good news.
GM, Toyota, DaimlerChrysler AG, Honda Motor Co. and Nissan Motor Co. all
"The consumers seemed to defy gravity in the month of May," said analyst
Erich Merkle of IRN Inc. in Grand Rapids. "These crossovers seem to be
on fire. There just seems to be this insatiable appetite out there for
Part of the gain was due to higher incentives, which rose 5.7 percent on
average over May 2006. That amounted to an extra $144 on the hood of
every car and truck sold. Toyota had the biggest gain, with incentives
up 49 percent.
GM sales increased 9.6 percent over last May, giving the automaker 23.7
percent of the domestic market. GM car sales, led by a 50.5 percent gain
for the Chevy Impala, were up 16.9 percent and truck sales rose 5.4 percent.
"Despite a pretty challenging industry, we had a pretty solid month,"
said Paul Ballew, GM's director of global market and industry analysis.
"We saw gains in both cars and trucks."
He credited new vehicles like the Silverado pickup and Saturn Outlook
crossover. Demand for the almost entirely refreshed Saturn brand surged
more than 75 percent.
DaimlerChrysler's soon-to-be-independent Chrysler Group reported a 4.3
percent gain in May, for a 12.7 percent market share.
"Our cars are up," said Darryl Jackson, vice president of U.S. sales for
Chrysler, attributing a 15 percent gain to a new marketing campaign
touting fuel efficiency. "We think it helped a lot."
Toyota posted its best month, with sales up 14.1 percent to give the
company 17.2 percent of the U.S. market.
That performance made May the third month since November that the
Japanese car giant has passed Ford to claim the No. 2 slot in the U.S.
Sales of the new Tundra full-size pickup totaled 17,727 units, more than
twice the year-earlier sales of the previous-generation Tundra.
Toyota has reported that about 20 Tundras equipped with a new 5.7-liter
V-8 have experienced engine failure due to a defective camshaft. It has
replaced those engines and intends to replace any other engines that
suffer similar problems but has no plans to recall the new truck, said
Randy Pflughaupt, new vice president of marketing at Toyota.
High gas prices fueled demand for Toyota's small and midsize cars and
helped make May the best month for its gasoline-electric hybrid Prius,
with 24,000 unit sales. At today's gas prices, Prius owners can recoup
the premium they pay for the hybrid in as little as five months, Toyota
Strong sales of the Civic and Civic Hybrid lifted Honda to a 2.5 percent
gain. The Nissan Altima and its hybrid version helped push Nissan up 7.4
Ford's hybrids also posted big gains in May, but not enough to offset
losses in larger volume models like the F-series, which saw sales drop
nearly 12 percent.
Ford did see big gains for its new crossovers and raised its full-year
sales forecast for the Edge 20 percent to 120,000 units. But Merkle said
Ford still has too many older vehicles in its lineup and cannot get
newer models to market fast enough.
"They need more hits," he said. "The Edge does that, but in today's
marketplace, you just need more."