American Sales Down In May

Statistics suggest that US auto sales dipped in May by about .4% over the same month last year and by more than 5% over April. Sales on the retail market were down by about 50,000 vehicles over the previous month, suggesting continued softness in the economy and supply chain woes continue to take their toll.

According to the latest seasonally adjusted annualized rate (SAAR) published by Edmunds.com, the overall annualized rate has declined by a million vehicles compared to April’s SAAR. For retail sales, the SAAR for 2011 is now below 10 million cars, trucks and vans.

At least some of the decline in sales may be attributed to a reduction in manufacturer incentive programs which have ramped down by about 5% month-over-month and by more than a quarter since the previous May.

The natural disasters in Japan, compounded by the disaster at one of that nation’s nuclear plants proved to be hurdles for Toyota, an automobile manufacturer that has already been struggling, especially in the US market.

Other automotive companies have also experienced supply line disruptions from the problems in Japan, suggesting the decline in sales may partially stem from inventory problems that have slowed the flow of new autos to the market.

According to a top economist at Edmunds, production problems from Japan are being resolved and soon the industry should return to normal. As far as Toyota is concerned, its top models should be back in full production mode sometime in June. This means people who want to buy the company’s Corolla and Camry models will soon be able to, suggesting that June may be a better month at least for Toyota.

Toyota isn’t the only Japanese manufacturer to see better times ahead. Honda has been hardest hit of all the Japanese car makers, but is also expecting sales to ramp up in the coming months as that company’s suppliers and facilities are quickly coming back online.

The other major Japanese automotive player, Nisan, has reported that it has had success in recovering from the disaster It has brought a motor plant back online that will help that company resume production at normal levels in the coming months.

Calendar problems may also have contributed to May’s decline in auto sales, especially compared to last year when May had 26 selling days. This year, May lost two of those days which means that there was less for sales.

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