Edmunds.com Forecast: May Sales Stall; Rising Gas Prices Blamed
May 24, 2007

New vehicle sales, including both retail and fleet sales, are expected to be 1.48 million units when May sales figures are announced next Friday. That’s down from last May, according to Edmunds.com.

This May had 26 selling days, one more than May 2006. When adjusted for this difference, sales decreased 4.2 percent from May 2006. On an unadjusted basis, sales this May are down 0.3 percent.

"As gas prices climb, many consumers are taking a conservative approach to car buying. Additionally, numbers are down because domestics continue to cut production, reducing fleet sales and better matching supply with retail demand. However, these factors are not causing sales to fall as dramatically as one might expect," said Jesse Toprak, executive director of Industry Analysis for Edmunds.com.

The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 53.1 percent in May, down from 54.2 percent in May 2006 and from 54.2 percent in April 2007.

Edmunds.com predicts Chrysler will sell 204,000 units in May 2007, up 6.59 percent compared to May 2006. This would result in a new car market share of 13.8 percent for Chrysler in May 2007, up slightly from 12.9 percent in May 2006 and down from 14.5 percent in April 2007.

Consumers apparently are no longer steering clear of Chrysler vehicles as some had when the company was initially put up for sale. In addition, it looks like Chrysler's new models and clever promotions are resonating with buyers. Chrysler has “given away” the Hemi engine and DVDs on minivans. Those promotions were accompanied by captivating advertisements that didn’t scream distress sale.

Ford insiders told us to expect double-digit drops this year, and they haven't miscalculated. Edmunds.com predicts Ford will sell 240,000 units in May 2007, down 12.3 percent compared to May 2006. This would result in a market share of 16.2 percent of new car sales in May 2007 for Ford, down from 18.5 percent in May 2006 and from 16.6 percent in April 2007.

GM can’t be too pleased. Despite its new models gaining interest, positive reviews and awards -– the GMC Acadia crossover was named most significant vehicle by Edmunds.com consumers earlier this month -- must be disappointed that its new products are not generating enough interest to boost its numbers.

Edmunds.com predicts GM will sell 340,000 units in May 2007, up a scant 0.4 percent compared to May 2006. GM's market share is expected to be 23.0 percent of new vehicle sales in May 2007, up slightly from 22.9 percent in May 2006 and down slightly from 23.2 percent in April 2007.

After a long drought of fresh product, Nissan now has some new models but they aren’t breaking sales records but likely are breaking the hearts of Nissan executives. Edmunds.com predicts Nissan will sell 85,000 units in May 2007, down about 1.8 percent from May 2006. Nissan's market share is expected to be 5.8 percent in May 2007, unchanged from 5.8 percent in May 2006 and up from 5.3 percent in April 2007.

Edmunds.com predicts Honda will sell 141,000 units in May 2007, down 0.8 percent from May 2006. Its market share is expected to be 9.5 percent in May 2007, down slightly from 9.6 percent in May 2006 and unchanged from 9.5 percent in April 2007. Honda launches the next-generation Accord in the fall and likely will see better numbers after its introduction.

And Toyota’s momentum continues, maybe in part because consumers associate the brand with fuel-efficiency despite the SUVs and trucks in its fleet. Edmunds.com predicts Toyota will sell 244,000 units in May 2007, up about 3.6 percent from May 2006. Toyota's market share is expected to be 16.5 percent in May 2007, up from 15.9 percent in May 2006 and up from 15.8 percent from April 2007.

Posted by Michelle Krebs at 8:38 AM under Analysis , Chrysler , Featured , Ford , GM , Toyota | Comments (0) | digg this | Seed Newsvine