Mixed Auto Sales Results For May Despite Heavy Holiday Promotion

2017's first-half auto trend continued into May, as automakers reported lukewarm sales results. Truck and SUV sales offered a reason to cheer, while car sales continued southward. Incentives continued to pad up sales results, although inventory levels saw some improvement.

For the first time since March 2016, Ford Motor Company F sold more vehicles than General Motors Company GM, gaining the status of the biggest U.S. automakers.

Ford recently removed Mark Fields from the position of CEO amid worries over fundamental and stock performances.

The performance comes on top of a weak April, when most automakers reported year-over-year decline in sales.

Industry Experts Less Than Sanguine

Ahead of the release of the monthly sales numbers, Edmunds forecast May vehicle sales of 1,527,363, up 7.5 percent from April and 0.3 percent higher than last year. The forecast was issued ahead of the Memorial Day weekend and the firm cautioned that the final tally would depend on whether shoppers visit dealerships and kick up sales over the holiday weekend.

Jessica Caldwell, Edmunds executive director of industry analysis, said, "As long as high inventories continue to drive attractive deals and the economy remains strong, consumers will be in a great position to take advantage of a buyer's market this summer."

Meanwhile, TRUECar estimated total new vehicle sales of 1,529,500 units for May, up 0.3 percent year over year. However, on a selling-day adjusted basis, sales were expected to be down 3.7 percent.

The May numbers translated to a seasonally adjusted annual sales rate of 16.8 million units for May, TRUECar said. The firm forecast incentive spending of $3,435 per automaker in May, up 9.5 percent year-over-year, but down 0.2 percent sequentially.

GM Sales Slip

GM said its May vehicle sales were down 1.3 percent at 237,364 vehicles. However, retail sales, accounting for roughly 80 percent of sales were up slightly.

For GM, crossover vehicles were in favor, with sales of the category up 19 percent on a U.S. retail sales basis. The company noted that average transaction prices, or ATP, were up $640 from April to $35,283. Quoting J.D. Power PIN estimates, the company said incentive spending as a percent of ATP was 11.6 percent in May, equal to the industry average.

Ford Edges Out Crosstown Rival With Sales Gain

Ford's overall U.S. sales for May rose 2.2 percent to 241,126 vehicles. This increase came about, as a 8.4 percent gain in fleet sales helped to offset a 0.8 percent drop in retail sales.

Ford said its ATP rose $2,100 in May. Inventories improved to 59 days of supply from 72 days of supply in April.

Among the type of vehicles, car sales fell 10.2 percent, while sales of SUVs and trucks were up 4.3 percent and 9.4 percent, respectively.

The Ford F-series pick-up truck was the star performing, having sold 76,027 units, up 12.8 percent from April. This, according to the company, marked the best May showing in 13 years.

No Salvation In Sight For Fiat Chrysler

Fiat Chrysler Automobiles NV FCAU reported a 1-percent decline in total vehicle sales in May. Fleet sales, accounting for 21 percent of the total sales, fell 7 percent, while retail sales climbed 1 percent.

Mixed Faring By Japanese Automakers

Toyota Motor Corp (ADR) TM's sales edged down 0.5 percent year over year to 218,248 vehicles, with sales on a daily selling rate down a steeper 3.9 percent, given that 2017 had an extra selling day over 2016.

Honda Motor Co Ltd (ADR) HMC reported year-over-year sales growth of 0.9 percent in May to 148,414 Honda and Acura vehicles. Truck sales were up 5.9 percent, while car sales declined 3.6 percent.

Nissan Motor Co Ltd (ADR) NSANY said its May vehicle sales fell 1.5 percent to 121,998 units, with Infiniti sales rising 3.5 percent, while the Nissan division sales fell 2 percent.

Outlook Not-So-Bleak

"Based on five consecutive months of year-over-year sales declines, our revised estimate for full year sales in 2017 is now 17.2 million units, which still represents a robust and healthy sales environment," said Eric Lyman, chief industry analyst for ALG.

Meanwhile, GM expects retail sales to remain strong in 2017 despite soft total vehicle sales. The company expects retail SAAR of 14.2 million units for 2017, equal to last year's record pace.

At Time Of Writing

• GM shares were 2.23 percent higher at $34.69.
• Ford was running up 3.32 percent to $11.49.
• Fiat Chrysler was adding 3.28 percent to $11.48.
• Toyota was up a modest 0.66 percent at $108.25.
• Honda shares were rising 1.19 percent to $28.25.
• Nissan was gaining 0.60 percent to $19.27.

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