Posted on 06/01/2005 5:04:36 PM PDT by Flavius
DETROIT (AP) -- The U.S. automotive scene changed little in May: General Motors Corp. and Ford Motor Co. again reported decreased demand for their vehicles, particularly trucks and SUVs, while Chrysler Group and Asian brands generally posted positive results.
ADVERTISEMENT To make matters worse for GM and Ford -- and their suppliers -- both automakers said Wednesday they plan to cut third-quarter production because of sluggish business. The cuts are sure to hurt the companies' bottom lines.
George Pipas, Ford's top sales analyst, said May was a weak month for the industry, especially compared to last year. The seasonally adjusted annual sales rate for May was 16.6 million vehicles, down from 17.7 million last May. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2004 were about 17 million.
"The consumer appears to have taken a little pause," Pipas said. "The Memorial Day weekend was pretty strong, but it didn't outdo the month-end reporting of a year ago."
GM and Ford, the nation's two biggest automakers, saw sales slip again in May as customers continued to turn away from their sport utility vehicles and trucks in favor of models from Asian competitors. The traditional Big Three automakers saw truck sales slip 4.4 percent in May, while Asian automakers saw comparable sales rise 6.9 percent.
GM's car sales fell 1.6 percent and truck sales slid 7.8 percent for the month compared with May 2004. GM's sales are now off 5.2 percent for the year. GM hopes that will change next month, when it offers consumers the chance to buy vehicles at the discount rate normally reserved for employees.
"Our challenge in the marketplace is breaking through with consumers," said Paul Ballew, GM's executive director of global market and industry analysis. "Our products are better than they are perceived."
At Ford, the No. 2 carmaker behind GM, new vehicle demand fell for the 12th straight month. Truck sales were down 6.4 percent, and total sales slipped nearly 3 percent for the Ford, Lincoln and Mercury brands. Ford's U.S. business is off 4 percent for the first five months of the year.
There were some bright spots for domestic automakers. DaimlerChrysler AG's Chrysler Group said car sales rose 13 percent and truck sales were up 3 percent for the month. The Chrysler 300 sedan and the Chrysler Town and Country minivan helped the Chrysler brand set an all-time monthly sales record, the company said.
Ford's Mustang coupe had its highest May sales since 1980, up 47 percent from last May. But that blistering pace will likely subside in June, Pipas said, because the company can't keep up with demand. GM's Cadillac division also enjoyed its best sales month in 12 years.
The news for Asian automakers was generally good, though results were lower than the double-digit increases some companies saw in April. Toyota Motor Corp.'s sales rose 7.8 percent last month, dragged down a bit by flat truck sales. Overall sales for the automaker are up 11.9 percent for the year.
Korean automaker Hyundai Motor Co.'s truck sales are up 23 percent for the year thanks to its new Tucson SUV, which had a record sales month in May. Hyundai's sales gained 8.5 percent for the month and 12.5 percent for the year.
Nissan Motor Co.'s truck sales are up 27 percent for the year, led by the Armada SUV. Nissan's sales jumped 15.5 percent in May and are up 15.8 percent for the year.
"We're getting on people's shopping lists for the first time" in the SUV segment, said Jed Connelly, Nissan North America's senior vice president for sales and marketing.
Honda Motor Co. saw a 19 percent decline in its aging car lineup. But its trucks, including the new Honda Ridgeline pickup, saw a 14.3 percent increase over last May. Honda's sales are up less than 1 percent for the year.
Sales percentages are adjusted for differences in the number of selling days. There were 24 selling days in May 2005 and 26 in May 2004.
GM, the world's largest automaker, said it plans to cut third-quarter production by more than 100,000 vehicles, or 9 percent. Ford, meanwhile, said it plans to trim third-quarter production by 17,000 vehicles, or 2 percent.
Auto suppliers, already pinched by high steel prices, have been struggling with the cuts all year. GM cut production by around 10 percent in the first and second quarters, and Ford cut production by 10 percent in the first quarter and nearly 5 percent in the second quarter.
Pipas said the cuts will help the automakers adjust their inventories and predicted that production will stabilize in the second half of the year.
GM shares fell 14 cents to close at $31.39 on the New York Stock Exchange. Ford shares fell 6 cents to close at $9.92 and Chrysler shares gained 30 cents to close at $40.59.
The unions are killing the American auto industry. They take about $3 grand from each car to cover retiree obligations.
In order to compete with the Asian models on price, they must compromise quality. While Asian vehicles have tight finishes and nice interiors, GM and Ford crank out rattle-boxes with cheap plastic interiors that squak and groan over every jot and tittle in the road.
For Ford and GM to provide that level of quality, they will overprice the cars for the market.
AND, when they come up with a winner (T-Bird and that new sport pick-up from Chevy) they WAAAAY overprice them. If they priced the T-Bird at $30 grand instead of $45 grand, they'd still be making them.
I drove a Caddy CTS-V but they did not design the rear end correctly and the wheel hop is horrid. But it goes fast once it gets moving. So, I'm going for either the Mercedes C55-AMG or BMW 545i.
I saw the ad they put together with Steve McQueen. I imagine he helped sell a few of those Mustangs.
Another really hot seller will be the Saturn roadster. It's supposed to be under $25K.
From what I can see, the new Mustang seems to be one of the few bright spots in their lineup (along with their trucks). They should give some serious thought to putting the Aviator concept into production (not the rebadged Explorer that they're selling now, but the concept vehicle they've been showing on this year's auto show circuit).
No kidding...I have seen the Moroni's and the Dealer tacks 12-15k on a SRT-8 Charger.They are just coming out for the past 2 Days.
We had a 300C-SRT-8 on the lot for about 30 Minutes....gone!
As a top Tech i get to drive ALL the cars on the lot...let me tell you something...the SRT's ROCKS big time.
Their products still can be a good value if you're willing to take them apart, inspect them and fix the problems, but who in their right mind wants to do that with a new automobile.
Then, they need to strip all options from the car -- radio delete, convenience package delete, sound deadening, etc. -- except for traction control and a cold-air induction box mounted behind a functional 'Air Grabber' scoop.
Lastly, they need to market it as the 'Hemi GTS' with two unique paint options exclusive to the model: Nuclear Fireball Orange and Petty Blue.
Result: 12.10@121mph in the 1/4 mile.
Yea, and VJ Day sure was one big party, too. ;-)
Like I said, I'd like to buy any of the SRT-8's. Preferably $1,000 over sticker but that isn't going to happen. I'd pay the Moroni but not over it.
The Bimmer 545i and the C55-AMG are awesome but for the price of one of those I should be able to get any of the SRT-8's and have a lot of change left over.
I have to admit. I'm a car nut.
Correction: $1,000 over INVOICE. Not sticker.
I saw the ad they put together with Steve McQueen.Click HERE:
www.fordvehicles.com/cars/mustang/launch/Choose connection speed...
Then click Gallery, and then click VIDEO gallery...Then click VISIT video gallery.
No, I have driven them and they are awesome.
As a matter of fact I have driven one yesterday;...it smokes the tires, plus they are coming with this nifty thing for the rear seats; a LCD TV!...all bells and whistles, satellite, GPS, Maps at all.
Beats Mercedes hands down (no electrical issues).
The irony is that the car is/was designed by Mercedes engineers, with Mercedes technology.
Don't you remember the old Galaxie 500? It was pretty much the bottom of the line full size car from Ford in the 1960s. It would run ok for about 2 or 3 years, and then it would need to be replaced.
It isn't a name that I would have chosen to resurrect. They should have gone a decade older and just called it the 'new Edsel' if that was the market they were trying to recover.
Read the article!
Ford's Mustang coupe had its highest May sales since 1980, up 47 percent from last May.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.