Toyota, Honda sales in U.S. climb in May

DETROIT Jun 2, 2006; Dee-Ann Durbin writing for the AP reported that Toyota Motor Corp. and Honda Motor Co. saw double-digit U.S. sales increases in May as consumer demand for more fuel-efficient vehicles grew, the automakers reported Thursday.

Rising fuel prices hurt domestic manufacturers, which rely more heavily on sales of trucks and sport utility vehicles. General Motors Corp. said its sales were down 12 percent for the month, while Ford Motor Co. said its sales were down 2 percent and DaimlerChrysler AG's Chrysler Group said sales were down nearly 11 percent

Paul Ballew, GM's executive director of market and industry analysis, said automakers felt the full brunt of a spike in gas prices that began in April. Rising interest rates also hurt sales, he said.

"We knew we'd have a rocky month," Ballew said.

Industrywide sales were flat compared with May 2005, with trucks and SUVs down 7 percent but cars up 6 percent, according to Autodata Corp. The seasonally adjusted sales rate for May, which shows what total sales would be if they remained at the same rate for the entire year, was 16.1 million vehicles. Automakers sold 17 million vehicles in 2005.

Toyota's overall sales were up 17 percent and car sales were up nearly 25 percent thanks to strong sales of the automaker's new Yaris subcompact as well as the redesigned Camry. Both cars went on sale in March.

Toyota said sales of its trucks and sport utility vehicles rose nearly 7 percent, mostly because of growing sales of crossovers like the RAV4 and the debut of the FJ Cruiser sport-utility vehicle.

"The pinch at the pump has made small cars part of the big picture, right along with hybrids," said Jim Lentz, group vice president for Toyota's U.S. sales division.

Honda's car sales shot up 21 percent as the Fit subcompact and redesigned Civic hit the market, while truck and SUV sales were up 9 percent thanks to strong sales of the Pilot crossover and Ridgeline small pickup.

GM said its car sales fell nearly 16 percent, largely due to an effort to cut back on sales to rental car companies. Truck and SUV sales were down 10 percent. Even sales of GM's 2007 Chevrolet Tahoe, which has enjoyed a sales boom this spring, was down 5.5 percent in May. Ballew said comparisons to last year's sales will continue to be difficult throughout the summer, since GM and other domestic automakers saw near-record sales last year because of its employee discounts.

"We're not looking at the (new) utilities and wringing our hands," he said.

Chrysler said its truck and SUV sales fell 14 percent. But sales of the 2007 Dodge Caliber, the replacement for the Neon, were strong and helped minimize losses on the car side. Chrysler's car sales were down 1 percent for the month.

Ford said sales of its Ford, Lincoln and Mercury trucks and SUVs fell 7 percent. The company's SUV sales were down 21 percent, Ford's U.S. sales analysis manager George Pipas said, and even sales of the best-selling F-series trucks were flat for the year.

Pipas said full-size trucks have withstood gas price increases in the past, but the company is watching closely to see what happens this time.

"The commercial demand, the businesses that buy the truck to get the job done, are supporting F-series sales in this environment, but some retail buyers are more cautious and seem to be delaying purchases," Pipas said.

On the bright side, Ford's car sales were up nearly 8 percent from last May. Ford said its Fusion mid-size sedan posted its best sales month yet with 14,490 vehicles sold, or 18 percent more than April. Ford also said sales of its hybrids have grown 55 percent so far this year, while crossover sales are up 12 percent.

Ford aims to boost U.S. sales with an aggressive incentive plan that began Thursday. Nearly all the company's 2006 vehicles are eligible for zero-percent financing and a prepaid debit card that can be used to purchase up to $1,000 worth of gas, or $1,100 for some trucks and sport utility vehicles. The vehicles must be purchased before July 31.

GM Chairman and Chief Executive Rick Wagoner said Thursday GM is trying to stick with its plan of lowering prices and relying less on incentives, but he acknowledged that could cost the company and left open the possibility of matching Ford's incentives. GM is providing an incentive that caps consumers' gas prices at $1.99 per gallon, but the program is only running in California and Florida so far.

"Everybody's taking their measure of the market and finding out what works for them," Wagoner said. "We're trying to operate under a different strategy."

Nissan Motor Co. said its sales were down 7 percent for the month as both cars and trucks took a dive. Nissan's sales were down 3 percent for the year.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages that are adjusted for the number of sales days in a month.