Nissan Motor Co. (7201)’s U.S. sales surged 25 percent in May, triple the industrywide gain, after cutting prices and increasing incentives.
Nissan’s result was better than the 22 percent increase that was the average of eight analyst estimates compiled by Bloomberg. Toyota Motor Corp. (7203), the world’s largest carmaker, and Honda Motor Co. (7267) reported gains that fell short of estimates. Subaru, the auto brand of Fuji Heavy Industries Ltd. (7270), led Asian automakers with a 34 percent increase in U.S. deliveries.
“When Nissan announced a price cut in the beginning of May, it signaled an aggressive play for market share in the U.S.,” said Jessica Caldwell, an analyst for Edmunds.com in Santa Monica, California. “The actual prices were only about 4 percent lower than April’s, but the announcement clearly had a big psychological impact to get sales moving.”
The price cuts and incentives boost by Yokohama, Japan-based Nissan coincides with a 13 percent drop in the yen against the dollar since the start of 2013. That’s aiding margins for Japanese automakers that had been under pressure after their home currency stayed at historic highs in 2011 and 2012. Nissan increased incentives 5.8 percent last month, according to researcher Autodata Corp.
By comparison, Toyota and Honda’s average incentives in May fell more than at any other major Asian brand, according to Autodata estimates.
U.S. sales for Japanese and South Korean automakers rose a combined 7.7 percent last month. That was less than the industry’s 8.2 percent increase to 1.44 million cars and light trucks, according to Woodcliff Lake, New Jersey-based Autodata.
Jose Munoz, Nissan’s senior vice president for North American sales, dismissed changes in the yen rate and the company’s price cuts as fueling the monthly gains. He also said the company didn’t increase incentive spending.
The decline in the yen isn’t “really an advantage for us,” Munoz said in a telephone interview yesterday. The company’s sales gains arise from new models added in the last year, including the Altima sedan and the new Pathfinder sport utility vehicle that “are made in the U.S., so they are really localized,” he said.
Those new models and more motivated U.S. dealers contributed to the company’s sales of Nissan and Infiniti brand vehicles expanding to 114,457 last month, from 91,794 a year earlier, he said.
Price cuts weren’t “the key driver of the good result in the month,” Munoz said. “We believe the key driver has been mainly the new models that we launched last year.”
The company also reported a fourfold increase in sales of Leaf electric hatchbacks to 2,138 units last month, compared with just 510 a year ago. By the end of June, sales of battery-powered Leafs may top 2012’s full year total of 9,819, Munoz said.
U.S.-based automakers Ford Motor Co. (F) and Chrysler Group LLC also reported May sales that topped analysts’ expectations, the result of strong demand for their full-size pickups.
Sales of large trucks, including Ford’s F-Series, Chrysler’s Ram and General Motors Co. (GM)’s Silverado, expanded 21 percent this year through May, almost triple the 7.3 percent increase for all U.S. light vehicles, according to Autodata.
“The fear for the domestic manufacturers is that as the yen weakens, you’re going to see Japanese automakers have a little bit more flexibility in terms of increasing incentive spend or lowering prices,” Alec Gutierrez, an industry analyst for Kelley Blue Book, said in a telephone interview.
“The growth in the pickup truck market thus far has more than outweighed any negative impacts from a softer yen,” he said.
Ford reported a 14 percent sales gain, ahead of 11 percent increase that was the average of 13 analysts surveyed by Bloomberg News. Chrysler had an 11 percent increase, compared with a rise of 6.4 percent, also the average of 13 analysts.
Toyota said it sold 207,952 Toyota, Lexus and Scion vehicles last month, up 2.5 percent from a year earlier. That was less than a 3 percent increase, the average of eight analysts’ projections.
While sales of Camry, the perennial leader in U.S. car sales, were down 0.9 percent to 39,216 in May, the model the stayed ahead of Honda’s Accord, April’s sales leader. The U.S.- built sedan hadn’t held the top spot since February as Nissan’s Altima surpassed it in March.
“In the mid-size segment, the fact that you’re seeing Altima now in the 30,000-a-month range is a big change; seeing all these models coming right up on Camry is a big change,” said Larry Dominique, president of TrueCar Inc.’s ALG and a former Nissan product planner. “It was a strong month overall for that entire segment.”
Toyota’s incentives as a percentage of the sales transaction price rose to about 6.6 percent in May from 5.5 percent in April, Dominique said.
Toyota also said sales of its Prius hybrid line were the best in a year, rising 9.5 percent to 23,522. The company has said it will begin increased advertising efforts to further boost sales the four-vehicle Prius line.
This week, Toyota will show its restyled Corolla compact, due later in the year, Bill Fay, group vice president for U.S. sales, said in a conference call yesterday. Sales of Toyota’s Lexus luxury line grew 3.6 percent to 22,229.
“Toyota might have only shown a modest increase compared to some of its competitors but it had a very strong month last May,” Caldwell of Edmunds said. “It’s especially impressive that Camry continues to control the top spot among all passenger cars, considering how fierce the competition has grown in the mid-size segment.”
Honda, Japan’s third-largest automaker, behind Toyota and Nissan, sold 140,013 Honda and Acura vehicles last month, a 4.5 percent increase that missed a 5.7 percent gain that was the average of eight analysts’ estimates.
Accord was second in deliveries only to Camry, with 33,218 last month, up 12 percent from a year earlier. Sales for Acura, Honda’s U.S. premium line, shrank 1.5 percent to 14,364, the company said.
Combined sales for Hyundai Motor Co. (005380) and affiliate Kia Motors Corp. (000270) rose 1.6 percent from a year earlier, the smallest gain among major automakers. The two Seoul-based carmakers beat the 1.6 percent decline that was the average estimate of seven analysts.
Hyundai’s deliveries grew 2 percent to 68,358, a record for the month, and Kia reported sales of 52,327, 1.1 percent more than a year ago.
Subaru, which is expanding its Lafayette, Indiana, plant to meet U.S. demand for its all-wheel-drive models, reported sales of 39,892 vehicles last month, up from 29,724 a year ago. Gains for brand were led by a 33 percent jump in Outback deliveries to 12,270, from 9,192 a year earlier.
Toyota rose 2.1 percent to close at 5,930 yen in Tokyo, in line with the advance by the benchmark Nikkei 225 Stock Average. Nissan rose 2.7 percent and Honda climbed 0.8 percent.
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