GM, Ford lose ground to Asian rivals

updated 6:04 p.m. ET June 1, 2005

DETROIT - The U.S. automotive scene changed little in May: General Motors Corp. and Ford Motor Co. again reported decreased demand for their vehicles, particularly trucks and SUVs, while Chrysler Group and Asian brands generally posted positive results.

To make matters worse for GM and Ford — and their suppliers — both automakers said Wednesday they plan to cut third-quarter production because of sluggish business. The cuts are sure to hurt the companies’ bottom lines.

George Pipas, Ford’s top sales analyst, said May was a weak month for the industry, especially compared to last year. The seasonally adjusted annual sales rate for May was 16.6 million vehicles, down from 17.7 million last May. 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 2004 were about 17 million.

“The consumer appears to have taken a little pause,” Pipas said. “The Memorial Day weekend was pretty strong, but it didn’t outdo the month-end reporting of a year ago.”

GM and Ford, the nation’s two biggest automakers, saw sales slip again in May as customers continued to turn away from their sport utility vehicles and trucks in favor of models from Asian competitors. The traditional Big Three automakers saw truck sales slip 4.4 percent in May, while Asian automakers saw comparable sales rise 6.9 percent.

GM’s car sales fell 1.6 percent and truck sales slid 7.8 percent for the month compared with May 2004. GM’s sales are now off 5.2 percent for the year. GM hopes that will change next month, when it offers consumers the chance to buy vehicles at the discount rate normally reserved for employees.

“Our challenge in the marketplace is breaking through with consumers,” said Paul Ballew, GM’s executive director of global market and industry analysis. “Our products are better than they are perceived.”

At Ford, the No. 2 carmaker behind GM, new vehicle demand fell for the 12th straight month. Truck sales were down 6.4 percent, and total sales slipped nearly 3 percent for the Ford, Lincoln and Mercury brands. Ford’s U.S. business is off 4 percent for the first five months of the year.

There were some bright spots for domestic automakers. DaimlerChrysler AG’s Chrysler Group said car sales rose 13 percent and truck sales were up 3 percent for the month. The Chrysler 300 sedan and the Chrysler Town and Country minivan helped the Chrysler brand set an all-time monthly sales record, the company said.

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