New-vehicle sales for May are rolling in today, and the overall numbers are likely to drop dramatically as automakers absorb the double whammy of fewer cars to sell, and lower incentives cutting into demand.
Reuters estimates the annualized rate for sales in May will check in around 12.6 million units, a strong increase over 2010, month over month--but the first month this year in which sales didn't clear the 13-million hurdle.
Of the major factors affecting sales, the March 11 earthquake and tsunami in Japan are hitting some automakers particularly hard, notably Toyota and Honda. Reuters also cites slimmer rebates and incentives as a root cause--they're down by more than 25 percent this year, giving consumers reason to delay new-car purchases as they wait for better deals.While Toyota and Honda lose share from tight availability, domestic automakers such as GM (NYSE:GM) and Ford (NYSE:F) are expected to pick up share, as are Korea's Kia and Hyundai. Even so, some popular small cars not built in Japan are still in tight supply. The 2012 Ford Focus has a 34-day supply on hand, Reuters reports, while the 2011 Chevrolet Cruze is down to a 39-day inventory--in an industry where a 60-day supply is judged normal.
Without small cars to sell, automakers may actually move more SUVs and pickup trucks, even though gas prices are still near $4 a gallon. Along with minivans, trucks and utes could approach 47 percent of new-vehicle sales for May.
The results by automaker, as they come in:
General Motors: GM says sales fell by a percent as it moved fewer fleet vehicles. On a positive spin, GM says retail deliveries were up 9 percent; Buick was up 24 percent and GMC up 8 percent, while Chevrolet fell 4 percent and Cadillac, 6 percent.[Reuters via Yahoo]
This story originally appeared at The Car Connection