High gas prices, the weak economy and low consumer confidence are taking their toll on larger vehicles.
DETROIT — U.S. auto sales in May brought the starkest signs yet that gas prices have dramatically shifted the market to smaller cars, as the top-selling Ford F-series truck was dethroned by cars from Toyota and Honda.
GM said Tuesday its sales fell 28 percent last month compared with a year earlier, with a 37 percent decline in truck and SUV sales and a 14 percent drop in car sales. At the automaker’s annual meeting in Wilmington, Del., Tuesday, CEO Rick Wagoner said GM will close four truck and SUV plants in the U.S., Canada and Mexico by 2010, affecting 10,000 jobs.
Ford’s sales fell 16 percent for the month, while Chrysler’s sales were down 25 percent and Toyota’s sales slipped 4 percent. Overall sales were down 11 percent compared with last May, according to Autodata.
Honda, riding the wave of customers seeking better fuel efficiency, said its sales rose 18 percent; a 36 percent increase in car sales made up for an 8 percent decline in truck and SUV sales.
Most Read Business Stories
- FAA safety engineer goes public to slam the agency's oversight of Boeing's 737 MAX
- MacKenzie Scott marries Seattle teacher after Bezos divorce
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- Microsoft’s $10 billion Pentagon deal at risk amid Amazon fight
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
Nissan said its sales rose 8 percent, with a 19 percent increase in car sales offsetting a 10 percent decline in trucks.
High gas prices, the weak economy and low consumer confidence are taking their toll on larger vehicles. Ford sales chief Jim Farley said small and midsize cars made up 47 percent of sales last month, up from 34 percent in February.
The shift represents 1.5 million vehicles at Ford.
“May was a watershed month. We are, as an industry, catching up with the breathtaking choices customers are now making,” Farley said in a conference call with media and analysts.
The Toyota Corolla and Camry and Honda Civic and Accord sedans each outsold the F-series truck, which saw monthly sales plummet 31 percent last month to 42,973. F-series trucks have been the best-selling trucks in the U.S. for 31 years and the best-selling vehicles overall for nearly as long.
Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, said the U.S. market will likely look like the European one, where small cars make up nearly 40 percent of sales, in five to 10 years. That shift could make it harder for the Detroit Three to win customers, he said.
“Only a few companies ever made really good trucks, but a lot of companies make good little cars,” he said. “The competition level is going to go up, way up.”
Ford’s U.S. car sales were up 3 percent compared with last May, and it sold more Ford Focus small cars. But pickup and SUV sales dropped 26 percent. Farley said the company plans to offer an employee-pricing discount on F-series trucks this summer to clear out inventory before the new F-series arrives this fall.
Toyota’s U.S. sales dropped 4 percent for the month, as flat results for cars were dragged down by a 12 percent decline in trucks and SUVs.
Chrysler said car sales fell 33 percent and truck sales were down 22 percent despite an incentive program that lets buyers lock in gas prices at $2.99 per gallon. Chrysler said the decline was mainly due to a 40 percent cutback in sales to rental-car companies and other fleets.
Steven Landry, executive vice president for North American sales, said the $2.99 gas incentive has lured people into dealerships and will be continued through July 7. He said between 5 and 10 percent of buyers are choosing the fuel guarantee over other incentives.
Landry said May’s sales figures were sobering.
“This month is one that particularly lets us look deep into the numbers and determine our game plan for the rest of this year,” he said.