Amid increasing signs that the U.S. new-car market is softening, May was a mixed month for the "big three" Japanese automakers, Toyota (NYSE: TM), Honda (NYSE: HMC), and Nissan (NASDAQOTH: NSANY).
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Toyota reported that its U.S. sales fell slightly (0.5%) in May from a year ago. Like most other automakers, Toyota has been feeling the effects of an ongoing shift in buyer preferences toward car-based "crossover" SUVs -- and away from sedans.
Huge sales of the compact RAV4 crossover are helping to offset Toyota's sedan struggles. Image source: Toyota.
For many years, Toyota was heavily dependent on sales of its mainstay sedans, particularly the compact Corolla and midsize Camry -- and to a somewhat lesser extent, the hybrid Prius. But Toyota also has a range of well-regarded (and competitively priced) crossovers, and more recently, has been able to increase production of them to meet surging demand, largely offsetting its sedans' declines.
Here's how that played out in May:
- Sales of Toyota-brand cars fell 16.5%, with the Corolla (down 14.8%), Camry (down 15.4%), and Prius (down 23.1%) all posting double-digit declines.
- Sales of Toyota-brand SUVs rose 15.1%, paced by the huge-selling compact RAV4 (up 14.1% to a whopping 38,356 sold), and one-size-up Highlander (up 17.6%).
- Lexus-brand sales fell 8.6%, as solid sales of its SUVs weren't enough to offset a nearly 24% decline in sales of Lexus cars.
Honda said its U.S. sales rose 0.9% in May from a year ago. Honda's story in the U.S. over the last couple of years has been similar to Toyota's: A buyer migration away from its longtime mainstay sedans -- the small Fit, compact Civic, and midsize Accord -- and toward crossover SUVs that it struggled to supply in sufficient numbers.
Good sales of the upscale Acura RDX crossover helped Honda to a small sales gain in the U.S. last month. Image source: Honda.
But as with Toyota, production increases have helped Honda keep pace with SUVs in recent months.
- Sales of Honda-brand cars fell 3.4% in May. Accord sales were actually up solidly (5%) from a year ago, but the Civic (down 9.6%) and Fit (down 10.5%) both posted declines.
- Sales of Honda-brand trucks, as a group, rose 5.6%, paced by gains for the small HR-V (up 29%) and compact CR-V (up 9.6%, to 32,186 sold). Those were offset somewhat by declines for the Odyssey minivan (down 26.3%) and larger Pilot SUV (down 11.3%).
- Acura-brand sales rose 2.8%. Sales of the brand's cars, as a group, fell 6.4%. But the TLX sedan's sales rose 8.4% as dealers began selling down inventories of 2017s ahead of the arrival of a revamped model this fall. Acura's crossover SUVs, the MDX (up 2.4%) and RDX (up 12.8%), both gained.
Nissan said that its U.S. sales rose 3% in May, a gain powered by good results for -- you guessed it -- trucks and SUVs.
Nissan has aggressively chased sales gains in the U.S. in recent quarters, boosting sales to rental-car fleets as rivals like General Motors (NYSE: GM) reduced rental-fleet sales in a bid to increase profitability.
Strong demand for the Infiniti Q60 coupe helped Nissan's upscale brand to a market-beating gain in May. Image source: Nissan.
It has also ramped up its incentive spending: TrueCar analysts estimate that Nissan spent an average of $3,867 per vehicle on incentives in May, up almost 20% from a year ago. That's much higher than TrueCar's estimates for Toyota ($2,323) and Honda ($1,833) -- and not far behind Ford Motor Company($4,090), which sells huge numbers of full-size pickups, a segment in which incentives have historically been quite high.
Is it paying off? We'll know more when we get a look at Nissan's margins for the current quarter. But here's how its U.S. sales went in May:
- Sales of Nissan-brand cars, as a group, fell 13.1%. Sales of most models declined, though the big Maxima sedan (up 18.2%) and electric Leaf (up 42.2%) were exceptions.
- Sales of Nissan-brand trucks (including SUVs and crossovers) rose 22%. Highlights included the compact Rogue crossover (up 18.6%, to 32,533), the Pathfinder (up 8%), the larger Murano (up 7.2%), and the revamped Titan pickup (4,937 sold, up more than fourfold from a year ago).
- The trend reversed at Nissan's luxury brand, Infiniti, where an overall sales gain of 15.6% was driven by -- surprise -- car models. Sales of Infiniti's cars rose 60.7% on strong results for the compact Q50 sedan (up 42.4%) and revamped Q60 coupe (972 sold, up from 103 in May of last year). Sales of Infiniti's SUV models, as a group, fell 1.6% on weak results for its biggest sellers, the QX50 (down 24.6%) and QX60 (down 19.3%) models.
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