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.
I am seeing a TON of Mustangs out there...
maybe their other styles arent selling?
I really dont know.
But chinese cars will be 5000 to 7000 k per new...
Hard to pass on that ...
prediction: china will buy Saturn from GM. that will give them a name brand and a first class distribution network for chinese made cars.
The new Mustang looks great, but the Five Hundred is heading straight to the rental counters. The Five Hundred may be a nice car, but they managed to actually make a car that looked duller than the Taurus.
I've been trying to get a hold on a Chrysler 300 SRT-8 but they are impossible to find. There are some on ebay for $65K+. Gads!
My buddy that has a Hummer dealership has already pre-sold 50 Hummer H3's at full sticker price. They are selling like crazy.
They need to cram the Mustang V8 into the 500.
>> Ford's Mustang coupe had its highest May sales since 1980, up 47 percent from last May. <<
HELLO. Didn't you read the article.
If they're anything like the old Yugos, it will be quite easy to pass on that. Better to buy a quality used Japanese model than to purchase new Chinese junk.
I was driving on a turnpike, and the transmission gave out. It was not a pretty time, I can assure you! My husband, who is an automotive industry expert, told me that he had been researching the van, and knew that Honda was having trouble with this transmission, so what they did was extend the warranty to 100,000 miles for the 2000 and 2001 models. Ours fell into that category, and being at 98,000 miles when it happened, it was covered by the warranty.
However, they continue to use the troubled transmission to this day, and stopped the extended warranty after 2001. If you have to replace it without the warranty, it costs $5000.00.
It will be our last Honda vehicle. We were thinking of Toyota next, but they also have problems, and seem to be practicing the American auto manufacturers practice of planned obsolescence; I doubt that we will be purchasing a Toyota.
I think we'll be taking a look at the Germans, but will first ask The Man (aka: Mr. Automotive, my hubby).
Are you saying GM is a yugo? that would explain why the sales are tanking...
0 Years Agreement for Beijing Jeep Corporation
May 31, 2002, Auburn Hills, USA / Beijing, PRC - DaimlerChrysler and Beijing Automotive Industry (Group) Company (BAIC) today announced details of a 30-year agreement for their joint venture company in China, Beijing Jeep Corporation. The agreement is pending final Government ratification.
The parties will continue their cooperation in China with an agreement that extends the joint venture until 2033. Beijing Jeep Corporation became China's first automotive joint venture when it was established in May 1983.
"This extension of the agreement between Chrysler Group and BAIC is a clear indication that we have a long-term commitment to this joint venture and to our presence in China and the region," said Dieter Zetsche, Chrysler Group President and Chief Executive Officer. "The introduction of the Jeep Grand Cherokee, and the two new models in the pipeline, are clear evidence that BJC will be a competitive player in the new automotive environment created by China's accession to the World Trade Organization."
Last September, Beijing Jeep started local production of the Jeep® Grand Cherokee, a vehicle that incorporates advanced four-wheel-drive technology. The Jeep Grand Cherokee allows the company to reach a previously untapped segment for high-end sport utility vehicles. During the next two years, BJC will also start production of two new models targeted for the Chinese market. Details of the two new vehicles will be announced later this year.
"We have enjoyed a very fruitful 19-year relationship," said An Qingheng, Chairman of BAIC/BJC. "Beijing Jeep was the automotive joint venture pioneer in China. Since 1983, we have introduced new production technologies and helped to launch the modern sport utility segment in China. We are confident that our partnership will continue to grow in the future."
Significant savings have been realized during the last six months through DaimlerChrysler's global alliance strategy, particularly in the development of tooling, stamping and engines for the future models. Modern production initiatives and closer cooperation with local suppliers will allow BJC to become more efficient while continuing to improve product quality. The company currently produces the Jeep Grand Cherokee, the BJC Cherokee, and the utility vehicle BJ2020.
"In an effort to increase sales and improve service, we also plan to strengthen the dealer network," said Thomas Hausch, Executive Director of International Sales and Marketing, Chrysler Group. He indicated that Chrysler Group is exploring, together with its global alliance partners, how to better leverage its sales and service presence in the market.
"This agreement and our active business initiatives are a crystal clear indication of DaimlerChrysler's strong and long-term commitment with China," said Eike Lippold, CEO of DaimlerChrysler China Limited (DCCL).
The agreement calls for DaimlerChrysler to hold 42.4% ownership stake at BJC while BAIC retains 57.6
Chrysler SRT series is very cool. I love the redesign of the 300 and the H3 looks very good also.
The Pontial Solstice will probably be a hit too.
Most of the GM line is floundering because nothing they have generates excitement AND can be considered affordable. The Solstice will break that mold.
Most of the VW line is looking pretty dated but they have cars that can get upwards of 70mpg in Germany. Talk about name recognition if they brought that over here.
Ford almost got it with the new(old) Mustang but what the heck were they thinking with the 500?
the G6, Cobalt, and LaCrosse are just fine in their segments.
I heard of the problem with the Honda transmissions. That is exactly why I unloaded my two year old Acura MDX. You can tell how bad that transmission design is by just monitoring the transmission fluid.
Anyway, what have you heard about Toyotas? Is it the engine sludge issue?
Not much to buy out there - I'll probably go for a used Camaro or Firebird when the time comes. In a pinch, maybe a Grand Marquis or Monte Carlo but that's about it.
Maybe Ford would do better if it wasn't spending time, focus and money supporting the homosexual agenda. I'd bet for every sodomite that buys a Ford product 2 families are so offended by the what Ford is doing they will never buy another Ford product.
The New Ford Five-hundred(what's up with this name anyway?), looks like a carbon copy of the Toyota Camry. Also is totally bland in styling and boring to look at it. One needs a quart of whiskey to spend money on that type of car.
OTOH GM is no better; the new Pontiac G6, the Ma xx, still have rear drum brakes, a rear solid axle and overall "50's technology.
Their trucks are at the bottom end when compared to the competition(check any car/truck magazine)
GM and Ford relied on their market power for many decades(obviously for good reasons), following the mantra "if ain't broke don't fix it".
That's a very slippery slope, for which it shows that they do not have a future program/plan.
As a last resort for their short comings on the North American continent, both companies rushed into rebadging European made cars with American names trying to revive their sluggish sales in the US.
As one can see they failed...
OTOH DC got the smarts and came out with a vengeance. Hot new models like the 300C, Magnum, Charger, Viper powered Trucks, SRT 4,6,8 Models, they are flying of the showrooms.
I see young kids buying the 300C because the cars are looking "cool". The DUB guys are snapping the new R/T Chargers Hemi, you wouldn't believe it!
How do i know it?...I work for a DC Dealer!
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