DETROIT — Americans bought more cars in May than in any other month this year, drawn by sale prices that pushed General Motors and Chrysler’s sales above expectations despite their forays into bankruptcy protection. Sales were still 34 percent lower than a year ago.
But low fuel prices encouraged the sale of bigger gas guzzlers while small cars stacked up on dealer lots. That could be a problem for the Obama administration, if the demand for more fuel-efficient vehicles drops just as it is forcing the U.S. auto industry to produce more of them.
"The great migration away from fuel efficiency is once again under way,” said Mike Jackson, chairman and chief executive of AutoNation Inc., the nation’s largest automotive retailer. "The price of gasoline determines the type of vehicles consumers buy. Period.”
All major automakers including Toyota and Honda posted drops from last year, with Ford Motor Co. benefiting from the financial woes of its Detroit competitors and recording the smallest decline at 24 percent.
GM and Chrysler have pegged their recoveries to fuel efficiency — Chrysler with small cars from Fiat SpA, GM with new American-built compacts and subcompacts, and both with plans for electric vehicles. It could take months of expensive gasoline for people to buy their new products.
Small-car sales drop
Almost every small-car model saw significant drops in sales compared with May of last year, which was a record month for many models as gas headed for $4 per gallon.
Honda’s Civic was off 61 percent, Ford saw Focus sales drop 54 percent, and GM’s Chevrolet Cobalt was down 52 percent. Even Toyota’s Corolla, the perennial small-car leader, saw sales drop 55 percent.
Yet sales of Ford’s midsize Fusion jumped 9 percent, with four-cylinder engines making up 70 percent of the sales. Chevrolet’s Malibu sales were down 11 percent, a far lower decline than the rest of the market.
Jackson said gasoline price instability makes it difficult for automakers to decide what models to produce and dealers to decide which ones to stock.
Early in the month, Honda had thousands of Civics stacked up in the lots of a closed Ford plant west of Cleveland, stored there from factories in Ohio and Canada. Many have since been shipped to dealers, the company said.
Fuel efficiency
Jackson said all automakers’ small cars suffered, but Honda was hit harder as a company because it is the most fuel efficient.
"Honda is perfectly positioned for $4 per gallon gasoline and is out of favor at $2 per gallon,” he said.
Jackson said he is changing his dealers’ mix to larger vehicles, from midsize cars up to sport utilities, because that’s what people want to buy.
But George Pipas, Ford’s top sales analyst, said the trend to more efficient vehicles is continuing. Premium gasoline is back to $3 per gallon in California, said Jesse Toprak, executive director of industry analysis for the auto Web site Edmunds.com.
"We know the downsizing of the American vehicle has been taking place for several years and is still going on,” he said. "I think the midsize segment does have some appeal, but don’t forget fuel efficiency is still key.”
"The winner is still Ford out of all automakers in terms of their May performance and the trending so far this year,” Toprak said.
by the associated press
But low fuel prices encouraged the sale of bigger gas guzzlers while small cars stacked up on dealer lots. That could be a problem for the Obama administration, if the demand for more fuel-efficient vehicles drops just as it is forcing the U.S. auto industry to produce more of them.
"The great migration away from fuel efficiency is once again under way,” said Mike Jackson, chairman and chief executive of AutoNation Inc., the nation’s largest automotive retailer. "The price of gasoline determines the type of vehicles consumers buy. Period.”
All major automakers including Toyota and Honda posted drops from last year, with Ford Motor Co. benefiting from the financial woes of its Detroit competitors and recording the smallest decline at 24 percent.
GM and Chrysler have pegged their recoveries to fuel efficiency — Chrysler with small cars from Fiat SpA, GM with new American-built compacts and subcompacts, and both with plans for electric vehicles. It could take months of expensive gasoline for people to buy their new products.
Small-car sales drop
Almost every small-car model saw significant drops in sales compared with May of last year, which was a record month for many models as gas headed for $4 per gallon.
Honda’s Civic was off 61 percent, Ford saw Focus sales drop 54 percent, and GM’s Chevrolet Cobalt was down 52 percent. Even Toyota’s Corolla, the perennial small-car leader, saw sales drop 55 percent.
Yet sales of Ford’s midsize Fusion jumped 9 percent, with four-cylinder engines making up 70 percent of the sales. Chevrolet’s Malibu sales were down 11 percent, a far lower decline than the rest of the market.
Jackson said gasoline price instability makes it difficult for automakers to decide what models to produce and dealers to decide which ones to stock.
Early in the month, Honda had thousands of Civics stacked up in the lots of a closed Ford plant west of Cleveland, stored there from factories in Ohio and Canada. Many have since been shipped to dealers, the company said.
Fuel efficiency
Jackson said all automakers’ small cars suffered, but Honda was hit harder as a company because it is the most fuel efficient.
"Honda is perfectly positioned for $4 per gallon gasoline and is out of favor at $2 per gallon,” he said.
Jackson said he is changing his dealers’ mix to larger vehicles, from midsize cars up to sport utilities, because that’s what people want to buy.
But George Pipas, Ford’s top sales analyst, said the trend to more efficient vehicles is continuing. Premium gasoline is back to $3 per gallon in California, said Jesse Toprak, executive director of industry analysis for the auto Web site Edmunds.com.
"We know the downsizing of the American vehicle has been taking place for several years and is still going on,” he said. "I think the midsize segment does have some appeal, but don’t forget fuel efficiency is still key.”
"The winner is still Ford out of all automakers in terms of their May performance and the trending so far this year,” Toprak said.
by the associated press
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