After an impressive start to the year, U.S. auto sales slipped 3.7 percent in
May -- to their slowest pace since last September -- due to confusing economic
signals, higher gas prices and shortages of Japanese cars and auto parts
following the country's devastating earthquake.
For Fort Lauderdale-based dealership chain AutoNation, the drop was even
worse. The largest U.S. dealership chain said Thursday that its new vehicle
sales fell 15 percent in May compared with the previous year because so many
of its sales -- 52 percent -- come from Japanese brands.
AutoNation said in a statement that its imported brand sales dropped 30
percent for the month to 7,110, but its Detroit Three sales rose 3 percent to
5,995. Premium luxury sales rose 1 percent to 3,242 for the month, the
statement said.
Nationwide, auto sales are still up 14 percent for the year to date, and
this year will still likely be better than last, even if the gains aren't as
strong as once expected.
Throughout South Florida, May was a tough month for many showrooms
featuring Japanese cars. National reports show that Toyota sales in the U.S.
declined by 33 percent last month, with drops of 23 and 9.1 percent
respectively of Honda and Nissan.
Inventory and parts have dwindled following the tragic March 11
earthquake and tsunami in Japan that shut some operations there. But
production has again geared up, and the outlook is looking better for the
summer.
"We'll be back to normal in the next few months," said Ernie Sims,
general manager of Al Hendrickson Scion, a Coconut Grove-based Toyota dealer.
Sims said that because the company had fewer cars than usual, it did not offer
special deals. Sales also dropped by half compared to May 2010.
"The incentives were less and we had to be smart in what we sold," he
said.
At Southeast Toyota Distributors, sales were down by about 25 percent in
May compared to May of 2010. The Deerfield Beach-based company is a part of JM
Family Enterprises, the world's largest independent Toyota distributor. Its
sales account for 20 percent of Toyotas sold in the U.S.
"Business and production are improving in June," President Ed Sheehy
said. "I see Toyota dealers becoming more aggressive and reclaiming their
market share." Normal levels of production could be expected early in the
third quarter, he said.
Brickell Motors, a Honda dealer in Miami, saw a decrease of almost 32
percent compared to May of last year, though Memorial Day weekend sales
remained approximately the same.
Brickell CEO Mario Murgado said that inventory was at an all-time high in
March before the earthquake and has dwindled since then.
He expects a decrease in June and July as well. But he remains optimistic
and is still taking steps to retain customers. "We're extending their leases
or putting them on short-term ones to move on to long-term ones later on," he
said.
At AutoNation, CEO Mike Jackson said in a statement that normal shipment
of Japanese autos and parts is expected to resume in August.
One dealer with a different story is Hollywood's Craig Zinn Automotive
Group. The company currently has an inventory of Toyota, Lexus and Subaru
worth $60 million and sold over 400 Japanese-made cars over Memorial Day
weekend.
Owner Craig Zinn attributes the surplus to good timing. The group bought
1,000 additional cars in anticipation of a price increase last December and
does not face the parts shortage that others do.
"We're in the opposite direction," Zinn said. "This is our selling
season."
The Associated Press and The Detroit Free Press contributed to this
report.
