By The Numbers: May Showers Detroit's Customers With Profit-Killing Incentives

Last month, I field tested a new methodology for analyzing the American car market. Reader feedback on TTAC’s month-by-month sales charts of “key” U.S. models was overwhelmingly positive. Your most excellent comments and insightful methodological suggestions were noted, logged and, where possible, incorporated. OK, so, May car sales were the highest so far this calendar year. Without further ado, here’s how our 19 models floated within this rising tide.

Passenger Cars

Taken as a whole, U.S. passenger car sales showed a sharp upturn in May. The Chevrolet Impala , Chrysler 300 and Toyota Camry all rebounded from their April dip. Ford did not share in this good fortune. After climbing steadily, Fusion sales dropped below 2006 levels for the first time since last November.

The Camry’s still the segment leader, but the Impala’s coming on fast. The mid-sized Canadian is now selling more briskly than it did during GM’s epic “fire sale for everyone” back in 2005 and was GM's best-selling passenger car in May. That said, GM lavished $1500 in incentives on the Impala– the highest amount they offer on a Chevrolet passenger car.

Pickup Trucks

For the first time since February, Silverado sales have topped last year’s levels. The good news comes with a minor caveat: GM is still producing and selling the “Classic” (non GMT900-based) Silverado, a cheaper model that’s buoyed by $2k to $3K rebates and dealer incentives. Still, the new model’s leading the charge.

Meanwhile, assisted by massive incentives (up to $5K rebates plus dealer incentives) the Dodge Ram also bested last year’s number. Chryslerberus is planning a redesigned Ram for 2009 with diesel engines across the board. They’ll most likely increase the incentives to keep current sales from tanking in anticipation of the new model.

Ford's F-Series continues to show lower sales than in previous years. Look for Ford to add to its $3k rebate as the Glass House Gang fight to keep their perennial best-seller at the top of the sales charts.

Tundra sales showed another record month. It remains to be seen if the model’s camshaft problems will damage the Tundra’s momentum, or if Toyota’s rep for bulletproof build quality will reduce the issue to a minor bump in the road.

In any case, the Toyota’s entry into a declining market has had the anticipated effect: pickup truck margins are down across the board.

Truck-Based SUVs

Tahoe and Explorer customers shrugged off high gas prices. Tahoe’s May sales have remained steady for the past three years. Explorer sales reached the highest level since last September.

Dodge and Toyota weren’t so lucky; Durango and 4Runner sales both continue their downward trajectory. The Durango has practically flat-lined in the mid-4K range, while 4Runner sales are the lowest they’ve been since last October.

Small SUV/CUVs

CUV sales split into two distinct camps: the old and the new. Sales of the elderly Chevrolet Equinox and Chrysler Pacifica fell well below those of previous years. If Chevy and Chrysler want to remain competitive in this hot market segment, they have to hit refresh in a big way, and fast.

Sales of the recently refreshed Ford Escape and Toyota RAV-4 rose sharply. The more boldly grilled Escape hit an all-time high in May, with the gas – electric hybrid model accounting for 14 percent of the total. RAV-4 sales were up by more than 2K units over last month, and against the same month last year.

New Models

All three of the new-for-‘07 models I’m tracking showed increases in May. The Jeep Compass rebounded slightly above last month’s performance, but still remains below the curve for the year. The GMC Acadia continues almost straight-line steady growth. After an inexplicable dip last month, Ford Edge sales are back, and they ain’t bad.

Total Sales

GM, Chrysler and Toyota all saw higher sales in May than in April, and with higher sales than May ’06. Even though Ford showed an increase from April, they still remain well below the previous years’ sales levels. (For cumulative sales YTD, click here: GM, Chrysler, Ford, Toyota .) But the numbers mask a worrying development.

In spite of The Big 2.8’s pledge to wean themselves from incentives, they haven’t. In May, GM’s incentives rose 6.1 percent (year on year) to a $2,950 per vehicle average. Ford’s incentives rose by 4.6 percent to $4,040 per vehicle. Chrysler's incentives soared by 7.1 percent to an average of $4,178 per vehicle. (Toyota’s incentives averaged $1,140 per vehicle.)

This does not bode well for Detroit. In 2006, GM and Chrysler’s North American operations lost an average of $1,436 and $1,072 respectively per vehicle. Ford lost a whopping $5,234 per vehicle. In contrast, Toyota and Honda made $1,200 on every vehicle sold. The greater Detroit’s incentives, the lower their profits. Or, let’s face it, the greater their losses. It’s still early daze, but 2007 is turning out to be a “make or break” year for The Big 2.8.