Car Sales Expected to Rise in May, but Ford’s to Crater

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Ford Motor Co. (NYSE: F) will be going the wrong way in May, as it has been across a number of its businesses recently, and as national cars sales rise while its fall. Cox Automotive has forecast that industry sales will rise 3.1% to 1,560,000 compared to May last year, while Ford’s will plummet 10.5% to 215,000.

Ford has had enough trouble recently to discontinue all but two of its cars in the United States. And many perceive its electric car development as behind most of the industry.

Ford’s two U.S.-based rivals are expected to do particularly well, with General Motors Co. (NYSE: GM) sales up 11.7% to 265,000. The industry will never get GM’s final number for the month, since it no longer gives out monthly sales figures. Fiat Chrysler Automobiles N.V. (NYSE: FCAU), which has struggled recently, is forecast by Cox to post a sales increase of 11.9% to 216,000. It is very rare for Fiat Chrysler sales to be close to Ford, let alone to pass them.

Toyota Motor Corp. (NYSE: TM) is expected to sell more cars than Ford. Its sales are expected to rise 0.8% year over previous year to 220,000. Its largest Japanese rival, Honda Motor Co. Ltd. (NYSE: HMC), will have sales of 150,000, or 1.1% more than last year.

Commenting on the month, Charles Chesbrough, senior economist at Cox Automotive, said:

This month’s sales volume is expected to rise over last year, but May 2018 has one additional selling day. Sales volume is expected to reach 1.56 million, an increase of nearly 50,000 units from this time last year and up 15.6 percent from April 2018. This selling rate, however, would mark the first month below 17 million SAAR since last August, when Hurricane Harvey disrupted the market.

Put another way, the overall market is slowing slightly.

Cox made another point that should trouble industry executives. There has been a massive shift in production and marketing to pickups, sport utility vehicles and crossovers, which have become consumer favorites. That may change if gasoline prices soar. Rebecca Lindland, executive analyst at Kelley Blue Book, said:

Gas prices continue to be in the news. Our survey shows that $4 a gallon is when consumers start thinking about a more fuel-efficient vehicle. I would encourage consumers to look at the most fuel efficient version of a vehicle they already want to buy, particularly if it comes in a hybrid. This will ensure long-term satisfaction with the vehicle, regardless of peaks and valleys in gas prices.

Just as executives in the car industry thought they might get ahead of the curve, it may turn on them. Nevertheless, the overall industry will be healthy in May, with the exception of Ford.


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