Toyota Tumbles to Fourth in U.S. Sales Amid Supply Crunch

Strong May boosts Chrysler to No. 3 spot.

Toyota fell to the No. 4 spot in U.S. auto sales in May amid shortages following Japan's devastating earthquake and as rival Chrysler posted solid gains, manufacturers' data showed Wednesday.

The parts shortages and a broader economic slowdown impacted most major automakers, with Honda down 23% and GM and Ford reporting slight drops amid weak fleet sales. Overall industry sales of 1.1 million vehicles were down 8.3% from April and 3.7% 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 that saw it lose the No. 2 U.S. 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% from a year ago to 108,387 vehicles in May and were down 0.6% 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's Gains Continue Chrysler -- which last week paid off billions in government loans used to restructure under bankruptcy protection -- leapfrogged into the No. 3 spot in the U.S. 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 No. 5 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% to 115,363 vehicles in May and were up 20% 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% at 48,212 and Hyundai up 21% at 59,214. Japanese automaker Honda's sales were badly hit by supply shortages, dropping 23% to 90,773 vehicles in May, but were up 7.4% 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% production capacity for most models in August." Nissan sales fell 9.1% to 76,148 in May, but were up 15% for the first five months of the year. GM, Ford Sales Down in May Market leader General Motors said May sales fell 1.2% to 221,192 vehicles, largely to a sharp drop in government, commercial and car rental fleet sales that offset gains with retail buyers. That compared to an 18% 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," U.S. 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%, also taking a hit on fleet sales even as retail sales grew. Ford analyst George Pipas noted that the No. 2 U.S. automaker could have sold more vehicles if it hadn't also been affected by supply problems. While the U.S. 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. U.S. auto sales have averaged 11.7 million vehicles annually in the past three years, down sharply from the 15 million to 17 million sold every year from 1994 through 2007. Copyright Agence France-Presse, 2011

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