Toyota's US sales plummet following Japan disasters

Toyota fell to the number four spot in US auto sales in May amid shortages following Japan's devastating earthquake and as rival Chrysler posted solid gains, manufacturers' data shows.

The parts shortages and a broader economic slowdown impacted most major automakers, with Honda down 23 per cent and GM and Ford reporting slight drops amid weak fleet sales.

Overall industry sales of 1.1 million vehicles were down 8.3 per cent from April and 3.7 per cent from May 2010, according to the research firm Autodata.

Toyota's plunge hits as the Japanese automaker is still recovering from a series of mass recalls which saw it lose the number two US spot to Ford in 2010 after a three-year reign.

"As expected, May was an especially challenging month due mainly to uncertainties about our production forecast," said Bob Carter, general manager of Toyota Motor Sales USA.

Toyota sales plummeted 34 per cent from a year ago to 108,387 vehicles in May and were down 0.6 per cent for the year to date.

With production ramping up sooner than expected in both Japan and North America, Carter said "we're optimistic that our sales outlook will continue to improve."

Chrysler - which last week paid off billions in government loans used to restructure under bankruptcy protection - leapfrogged into the number three spot in the US market for the first time in years.

Chrysler has been posting solid sales gains for more than a year now after a major revamp of its product offerings aided by its partnership with Fiat.

But it was still in the number five spot as recently as April when the supply shortfalls had not yet fully impacted Toyota and Honda.

Chrysler Group sales, including the newly introduced Fiat 500, rose 10 per cent to 115,363 vehicles in May and were up 20 per cent for the year so far.

Fred Diaz, Chrysler's top sales executive, said the gains confirmed that "our 2011 models continue to resonate with consumers."

South Korean automakers were also big winners, with Kia up 53 per cent at 48,212 and Hyundai up 21 per cent at 59,214.

Japanese automaker Honda's sales were badly hit by supply shortages, dropping 23 per cent to 90,773 vehicles in May, but were up 7.4 per cent for the year.

"May sales are on par with what we expected due to the lingering effects of parts and production shortages" after the March 11 quake, said John Mendel, executive vice president of sales for American Honda.

"We are confident that sales will rebound as our North American plants reach 100 per cent production capacity for most models in August."

Nissan sales fell 9.1 per cent to 76,148 in May, but were up 15 per cent for the first five months of the year.

Market leader General Motors said May sales fell 1.2 per cent to 221,192 vehicles, largely to a sharp drop in government, commercial and car rental fleet sales which offset gains with retail buyers.

That compared to an 18 per cent growth pace in the first five months.

"Clearly there was a bit of consumer hesitation beginning of the month but I don't think we'll continue to see that," US sales vice president Don Johnson said in a conference call.

"The trend line continues to be up," Johnson said.

Ford sales were down 0.1 per cent, also taking a hit on fleet sales even as retail sales grew.

Ford analyst George Pipas noted that the number two US automaker could have sold more vehicles if it hadn't also been affected by supply problems.

While the US auto industry recovery is expected to continue, sales are not likely to return to pre-recession levels before 2016, according to automotive website Edmunds.com.

"We expect this momentum to continue, but at a moderate pace, given the fundamental steps that are still needed for a full economic recovery, said Lacey Plache, chief economist at Edmunds.com.

US auto sales have averaged 11.7 million vehicles annually in the past three years, down sharply from the 15 to 17 million sold every year from 1994 through 2007.

-AFP

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