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Is Ford's (NYSE: F ) recovery in danger of falling behind?
Certainly the news on the surface looks pretty good: Ford posted another strong month in May, with U.S. sales up 23% over year-ago numbers. Year-to-date sales are up 31% over last year at this time, and the company claimed an increase in market share for the 19th time in the last 20 months. Sales of key models such as the Fusion, the F-150, and the Escape continued to be very strong, and numbers from important overseas markets like India and China showed solid gains as well.
But for Ford shareholders who have been riding the company's tremendous turnaround, there's a major new challenge emerging -- one that I didn't expect to see quite this soon.
Guess who just blew past Ford?
Nope, it's not Toyota (NYSE: TM ) . The Japanese giant was looking strong until the unintended-acceleration recalls and scandals emerged earlier this year, and while they're still a major global force, they've fallen well behind Ford in year-to-date sales in the U.S. despite aggressive incentives. However, Toyota remains firmly in third place, having sold nearly 45% more cars and trucks than its rival Honda (NYSE: HMC ) over the first five months of 2010.
No, it's Ford's ancient nemesis General Motors that has put Ford solidly in its rearview mirror. GM posted its own solid gains for May and seems to be settling right back in to its long-held position at the top of the U.S. sales charts.
Surprised? I am. It was just a couple of months ago that these three companies were neck-and-neck-and-neck for first place in U.S. sales, and I thought that 2010 could end up being the year that Ford passed by GM once and for all.
GM, after all, is just a year out of bankruptcy, and its management team is only now starting to come together after months of disarray. The company still has huge holes in its product line and a marketing message best described as "muddled" -- though the recent hire of marketing whiz Joel Ewanick should help with the latter. And despite their much-ballyhooed loan "repayment," they're still in hock to the U.S. government for some $43 billion -- a sum their impending IPO might not cover.
GM might finally be staggering to its feet, but it's still staggering. And now we're hearing that this trainwreck is the company that has run past Ford and Toyota for a solid first place in U.S. sales?
It's enough to make one wonder what GM will be like when it really gets its act together.
Under the General's hood
GM's sales were up 17% in May, a solid but not stunning number. But a look under the hood shows more impressive details: GM's four surviving U.S. brands -- Chevrolet, Buick, GMC, and Cadillac -- together posted a 32% gain over year-ago numbers. They're up 31% year-to-date, more than making up for lost sales from discontinued brands Saturn, Pontiac, and Hummer.
Bright spots? Key Chevy models -- Malibu, Silverado, Equinox, Camaro -- all showed nice gains at the retail level, and the new Cadillac SRX -- an SUV-like vehicle GM calls a "crossover" -- is selling briskly, as are its Buick and GMC cousins.
And as I said, GM is still getting its act together. It's about to bring a new small car to market, the Chevy Cruze, that is expected to be a big step forward from the current Cobalt. Buick's new Regal, derived from a European-designed Opel model, looks like it could be a hit. (Yes, a hit Buick -- Buick's U.S. retail sales were up 46% year over year in May, and believe it or not, the brand is hotter-than-hot in China.)
So is a real GM turnaround finally emerging? Let's put it this way: If the General's new products continue to be strong, and Ewanick manages to get the company's marketing act together, and they really do manage to pay off the government ... GM may be hard for anyone to catch.