June 1, 2006

Sales of American Autos Fell Sharply in May

Sales of American cars and trucks fell steeply in May, automakers reported today, with both General Motors and Chrysler posting double-digit declines.

In a sign of Toyota's ever-growing strength in the domestic auto market, the Japanese automaker displaced DaimlerChrysler as nation's No. 3 seller for the second straight month.

General Motors led the drop among the American automakers, falling 15.7 percent over last May when the numbers are adjusted for the difference in selling days. The company also said it would reduce third-quarter vehicle production in North America by 8.4 percent, a sign of its weakening position in its biggest but least profitable region.

For Chrysler, May marked the worst month for sales in two and a half years. Overall sales, which include the Jeep and Dodge brands, dropped 14 percent on an adjusted basis, the most since a 15 percent drop in September 2003.

In a reversal of fortune for German-American automotive giant DaimlerChrysler, its business was given a boost by Mercedes. In recent years, Chrysler has propped up DaimlerChrysler's numbers while Mercedes was more of a drag on sales. In May, Mercedes-Benz sales grew 21 percent in the United States on an unadjusted basis.

But that was not enough to keep Toyota at bay, which again sold more vehicles in the United States than DaimlerChrysler. Overall sales for Toyota, which included Lexus, were up 12.3 percent when adjusted. April was the first time Toyota outsold DaimlerChrysler domestically, although the Japanese automaker had occasionally sold more than the Chrysler Group in the past.

Ford Motor's sales dropped 1.9 percent on an unadjusted basis, mainly on the weak showing of its pickup trucks and sport utility vehicles. Sales of its top-selling Ford F-Series, the nation's best-selling vehicle, declined 5.8 percent. Other laggards were the Expedition (down 45.3 percent) and the Explorer (down 14.4 percent.)

S.U.V. sales were a problem for Chrysler as well. Sales of Jeep Grand Cherokees fell 41 percent and the Dodge Durango slipped 45 percent.

Ford fared better with its cars, with sales rising 6.4 percent over all. Its newest car models — the Ford Fusion, Lincoln Zephyr and Mercury Milan — helped push sales up.

Separately, Ford said it would scale back production in the third quarter by 2 percent compared with the third quarter last year.

General Motors had no such luck with cars in May. Car sales plummeted 19.2 percent while light truck sales, which include pickups, sport utility vehicles and minivans, fell 13.7 percent.

Sales of its new S.U.V.'s and pickups remained strong, with the Cadillac Escalade up almost 50 percent. The new Chevrolet Tahoe, however, slipped 5.5 percent. Honda reported that its overall sales, including Acura as well as Honda models, increased 11.4 percent on an adjusted basis in May.

Nissan reported an 11 percent drop in May.

All three American automakers saw their sales dip significantly last month despite far greater spending on rebates and discount programs than their Japanese rivals. Chrysler spent the most, an average of $3,642 in incentives for each vehicle, according to Edmunds.com. That was an increase of $100 from April.

Ford cut back on incentives in May, spending $3,200 a vehicle, compared with $3,294 in April, Edmunds said. G.M. spent the least of the three, about $2,774 a vehicle, but that figure was up by $273 a vehicle in May.