US Auto Market rebounds in May.
The US Auto market turned in a strong May, with the SAAR (seasonally adjusted sales rate) returning to Q1 levels after a dip in April. The 1.436M vehicles sold in May was a 106,651-unit improvement over May of 2012, and brought the SAAR to 15.2M units.
Here are your three car keys from May 2013 as the auto market heads into its summer season …
1. Trucks Big AgainBolsters Detroit’s Big 3
A consistent trend for most of 2013, trucks continue to drive the auto market in the first half of the year. Domestic automakers dominate the light truck market, so this is good news for Detroit.
For the first time in six years, light trucks represented more than half of all vehicles sold in the US auto market (51%).
Of the 106K+ increase in units year-over-year, 69% of the gain came from light trucks (+73K units).
As the construction and contractor markets remain positive, this trend could continue into the summer season. The health of this segment is a major key to Detroit’s continued momentum.
2. Ford Momentum ContinuesFord Quadruples GM’s Gain in May
May’s rebound was concentrated across a few brands.
Ford Motor Company continued a strong 2013, with a gain of over 28K vehicles versus May 2012. While Ford’s gain was roughly 4X that of GM for May, Nissan’s surge (+22K units) more than quadrupled Toyota’s increase.
To say the US auto market rebounded only tells part of the story. Four brands (Ford, Nissan, Chrysler, Subaru) accounted for 73% of May’s gain over a year ago. Together, these four automakers added nearly 78K units in sales.
Ford’s F-Series truck continues to top the US in sales by vehicle, with a comfortable lead over Silverado, Camry, and Accord in YTD units sold.
3. The Battle for #7Korean Brands Still Struggling.
Not long ago, it looked as if Korean makes Hyundai and Kia would run away in their battle for 7th largest auto brand in US auto sales (trailing Detroit and Japan’s respective Big 3s).
While the two Korean brands still rank 7th and 8th in unit sales, the gap between Hyundai/Kia and brands like Subaru, VW/Audi, and BMW has closed considerably.
To put this into perspective, consider Subaru’s rapid pace of growth. Subaru’s gain in May (+10K units) was larger than GM’s, Honda’s and Toyota’s, all three of which are operating on much larger scales.
* Daily Sales Rate (DSR): WardsAuto.com, U.S. Light Vehicle Sales by Company, May 2013.
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.