By on May 26, 2011

TrueCar released its May 2011 sales forecast. At this time in the calendar, these forecasts, based on real transactional data, usually come close to reality. For May 2011, TrueCar expects new light vehicle sales in the U.S. to be 1,060,392 units, down 3.7 percent from May 2010 and down 8.3 percent from April 2011(unadjusted basis for sales days). This would be a Seasonally Adjusted Annualized Rate (SAAR) of 11.85 million new car sales, down from 13.18 million in April 2011 and only slightly up from 11.63 million in May 2010. Why the sudden reluctance?

“Inventory constraints finally hit the Japanese automakers this month but the recovery in supply appears quicker than first anticipated,” said Jesse Toprak, VP of Industry Trends and Insights for “Current inventory shortages and perceived inventory shortages led to the lowest incentive spending in nearly nine years and the lowest SAAR of the year. This is a sizable speed bump on the road to recovery.”

And who will gain from gain from Japan’s loss? Not so much the Detroit 3. They have their own tsunami to deal with. “High gas prices affected large truck sales dramatically hurting GM and Ford,” says Toprak, “but because of their better balanced product portfolio, due to their new fuel-efficient models, they were able to weather the storm with no major damage.”

As intimated in early April, Hyundai/Kia shapes up as the big winner. “High-flying Hyundai-Kia Automotive will outsell Toyota Motor Sales U.S.A. and American Honda Motor Co. in May,” said Automotive News [sub] after reading the TrueCar forecast. If the forecast becomes reality, Hyundai/Kia will take the #3 position in U.S. market share, after GM and Ford.

Manufacturer May 2011 Forecast April 2011 May 2010 YoY May11 /10 MoM

May/Apr 11

GM 21.30% 20.10% 20.20% 1.10% 1.20%
Ford 17.80% 16.40% 17.40% 0.40% 1.40%
Hyundai/Kia 10.90% 9.40% 7.30% 3.60% 1.50%
Chrysler 10.40% 10.10% 9.50% 0.90% 0.30%
Toyota 10.30% 13.80% 14.80% -4.50% -3.50%
Honda 8.80% 10.80% 10.60% -1.80% -2.00%
Nissan 6.30% 6.20% 7.60% -1.30% 0.10%

Toyota, which had the #3 position in May 2010, would drop to #5, trailing even Chrysler. Toyota has the biggest exposure to the effects of the tsunami at home, and appears to become the most serious May casualty in the American market.

If TrueCar’s forecast pans out, the three largest Japanese brands, Honda, Nissan, and Toyota will have lost an aggregate 7.6 percent of market share between May 2010 and May 2011. The bulk of these losses, 3.6 percent will have singlehandedly scooped up by Hyundai/Kia, while the Detroit 3 have to divvy-up an aggregate gain of 2.4 percent.

Month-on-month, HoNiTo will have lost 5.4 percent of share. Detroit 3 will have gained a total of 2.9 percent, and Hyundai/Kia will have gained 1.5 pwercent of market share, the biggest gain of all brands on TrueCar’s list.

The TrueCar prediction jibes with an earlier estimate by J.D. Power. On May 19, JDP had forecasted sales of 1.07 million units for May, and a SAAR of 11.9 million. JDP’s number is adjusted for selling days. Adjusted for selling days, May could eke out a small gain – but this is high math which we will leave until the real numbers are in next week.


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