US Auto Industry Reports Higher May Sales Despite Skyrocketing Gas Prices

DETROIT June 2, 2004; John Porretto writing for the AP reporterd that auto sales rose 7 percent in May, as skyrocketing gas prices apparently did little to dampen demand for pickups and sport utility vehicles.

General Motors said its sales were up 6.8 percent. Ford Motor Co. saw sales of its Ford, Lincoln and Mercury brands rise 1 percent, while DaimlerChrysler AG's Chrysler Group reported that sales were 5.2 percent higher than in May 2003.

GM's truck sales soared 11.4 percent, while its car sales were level. Ford sold 1.7 percent more trucks, and 0.5 percent fewer cars. Chrysler said its truck sales were up 7.8 percent, while car sales fell 2.9 percent.

Asian companies saw more dramatic increases than domestic producers and benefited from greater truck sales.

Nissan Motor Co., whose overall sales rose 28.4 percent, saw truck sales soar 68.4 percent. Toyota Motor Corp.'s sales rose 12.6 percent, including a 13.8 percent in truck sales.

It was Toyota's best-ever sales month with 202,420 vehicles sold -- only the second time the company broke the 200,000 mark.

The seasonally adjusted annual sales rate for May was 17.84 million units, compared with 16.32 million in May 2003. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.

"Industry sales have remained strong despite higher gas prices," said Jim Press, vice president of Toyota's U.S. sales division. "We have not seen a major shift to smaller, more fuel-efficient cars, and the light truck segment is still showing its strength."

GM chairman and chief executive Rick Wagoner acknowledged the continuing drop in sales of gas-guzzling Hummer models -- they were off 30.5 percent last month -- but said the brand accounts for only a small portion of GM's overall SUV business.

"Hummers are down in part because they're a fashion statement," said Wagoner, speaking Wednesday at GM's annual shareholder meeting in Wilmington, Del. "That's completely predictable."

Wagoner said it's anybody's guess what happens in the coming months regarding gas prices, but he's hopeful they'll start to decline soon.

"Our experts say it looks like fuel prices should be generally peaking out or, at least as we get into summer, they should be easing," he said. "Time will tell on that."

Ford sales analyst George Pipas said high gas prices might be "giving consumers pause," but added that no dramatic shift in vehicle-buying habits had been seen.

Only Honda Motor Co. cited a different trend. The company's sales rose 14 percent, mostly due to cars, which were up 23.6 percent. Honda's truck sales rose 0.8 percent. The company attributed its success to its wide offering of fuel-efficient models.

Pipas said Ford needed to further trim its inventory. The company plans to trim third-quarter production by 4 percent compared to last year, he said.

David Healy, an analyst with Burnham Securities Inc., said Ford was losing market share in part because it had refused to match GM and Chrysler's incentives.

"They can get away with modestly higher prices than GM or Chrysler, but I think the gap now is too wide," he said.

On the whole, the industry boosted incentives in May after lackluster April sales. That helped balance out any concern over gas prices, analysts said.