News Column

May Car Sales Up 26 Percent

June 5, 2102

Dan Gearino

Honda posted its strongest U.S. sales since last year's tsunami, part of a solid May for the auto industry.

The company's sales rose 48 percent compared to the same month last year, helped by big increases for Accords and Civics.

"We think the market is operating on the strength of a lot of pent-up demand," said analyst Michelle Krebs of

The industry as a whole was up 26 percent. While that was a substantial increase, analysts had expected an even better result.

Honda, with two assembly plants in central Ohio, has struggled for more than a year because of natural disasters in Asia. In May 2011, sales plummeted because an earthquake and tsunami two months earlier had disrupted the supply of parts from Japan.

Toyota, another automaker hit hard by the tsunami, was up 87 percent for the month.

The Big Three -- Chrysler, Ford and General Motors -- were each up by more than 10 percent. The industry as a whole will likely be up by more than 20 percent once all companies report results.

Honda's resurgence was led by the Accord and Civic, which were up 83 percent and 75 percent, respectively. The Accord is assembled in Marysville and the Civic is assembled in Greensburg, Ind. The CR-V, built in East Liberty, was up 54 percent.

Because of the brisk sales, the East Liberty plant had added Saturday overtime shifts the past few weeks. The Marysville plant has also added some overtime shifts, though not as many as East Liberty, said spokesman Ron Lietzke.

Workers "are going to continue to work long hours to maintain the shipments to dealerships," he said. "That's a good problem to have."

Bob Carter, a group vice president for Toyota, said he was grateful to customers for giving the company a third consecutive month at the top of the sales charts. Toyota's brands also include Lexus and Scion.

The industry's year-to-date sales were up 13 percent. Honda's year-to-date sales were up 10 percent, and Toyota's were up 24 percent.

Krebs thinks accumulated demand is canceling out some of the economic challenges, such as the government's report of modest job growth that sent markets falling yesterday. Other analysts said they expected even better sales figures and saw the numbers as reason for concern.

Also, weather may be playing a role. A warm winter and spring contributed to an increase in traffic at showrooms. In doing so, some customers made purchases that they otherwise would have made in May or later, analysts have said.

"Obviously, the economy's probably slowing a touch," said Gary Bradshaw, a portfolio manager with Hodges Capital Management, which owns Ford shares. "I still think that car sales will continue to improve from last year, but it's going to be a struggle. There are plenty of headwinds in front of us."

Information from Reuters was included in this story.

Source: (c)2012 The Columbus Dispatch (Columbus, Ohio)

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