Ford tops GM with fleet sales, discounts
AUTOMOTIVE Memorial Day sales blunt slowdown
• Automakers tempered the U.S. auto market’s slowdown in May, with Memorial Day deal-making and discounted shipments to rental-car companies lending support to an industry running out of growth.
Ford Motor Co.’ s sales of cars and light trucks rose 2.3 per cent in May, with deliveries to fleet customers carrying the company to a rare monthly victory over General Motors Co. Ford, Nissan Motor Co. and Honda Motor Co.’ s gains positioned the industry for a shot at its first increase in total monthly deliveries this year.
Even if the U. S. market was able to eke out some growth last month, indications abound that the industry’s seven- year run of expansion is coming to an end. Without discounted deliveries to bulk customers, Ford’s sales would have dropped in May, as actual consumers dialed back purchases. Automakers also continue to spend record sums on incentives to support slumping passenger-car models and clear inventory from crowded dealer lots.
“It’s a bit of smoke and mirrors,” Jessica Caldwell, executive director of auto- market researcher Edmunds, said in an email. Automakers “really pushed the deals over the holiday weekend to prop up their May numbers.”
Analysts were projecting the industry- wide annual selling rate, adjusted for seasonal trends, slipped in May to about 16.8 million l i ght vehicles, compared with 17.2 million a year ago. This would mark the thirdstraight month of a sales pace short of 17 million, which last happened in 2014.
GM estimated an industry sales rate of 16.6 million for last month. While the Detroit-based company beat Ford on retail sales by about 33,000 light vehicles last month, GM’s total deliveries trailed its crosstown rival for the first time since March, 2016.
“It feels good for about 10 seconds, but we’re moving on to June,” Mark LaNeve, Ford’s U. S. sales chief, told analysts on a conference call. “It happens once in a while and we don’t pay much attention to it.”
Ford shares climbed as much as 3.4 per cent, their biggest intraday jump in almost five months, while GM advanced as much as 2.8 per cent. Better- than- expected May sales alleviated concerns the good times are over for the U. S. auto market, which have contributed to the companies’ shares trailing the benchmark S& P 500 Index this year.
Sport utility vehicles including Nissan’s Rogue, Ford’s Explorer and Toyota Motor Corp.’ s RAV4 continued to gain in May. With those models tending to sell at higher prices than slowselling sedans and coupes, automakers have more room to bargain with buyers.
“We’re in the soft landing that we expected,” Jeff Schuster, an analyst with researcher LMC Automotive, said. “Incentives are up, but so are sales of vehicles that can absorb discounts.”
Jamie Butte rs, David Welch Keith Naughton and