May Auto Sales Results Reveal a New Leader Among Detroit Three

Ford ended up selling more vehicles in the U.S. last month than General Motors, the usual No. 1 -- but there's more to the story.

Daniel Miller
Daniel Miller
Jun 2, 2017 at 1:49PM

Despite automakers' willingness to extend discounts and incentives over the Memorial Day holiday to boost their May sales a bit, U.S. light-vehicle sales declined a modest 0.5% last month, year over year. It was the third consecutive month that the seasonally adjusted annual rate of vehicle sales checked in below 17 million -- previously, the industry had topped that mark six consecutive times. With that said, here are some highlights from Detroit automakers' May sales data.

Trucks thrive

It was a solid month for Ford Motor Company (NYSE:F) investors -- at least when it comes to sales data. It was bumpy in terms of management stability, as Jim Hackett replaced Mark Fields as CEO. But the Blue Oval tallied 241,126 units sold in the U.S. during May, a 2.2% increase year over year. That result was good enough not only to outsell its crosstown rival, General Motors (NYSE:GM) -- which typically outsells all automakers in the U.S. -- but to beat the estimates of Kelley Blue Book, which had predicted a 1.2% decline. 

Ford's bright spots included truck sales reaching 99,237 units, a 9.4% gain over the prior year's May, and SUV sales reaching 81,324 units, a 4.3% gain. The strength of those two segments was enough to offset a 10% decline in car sales, which dropped to 60,565 units.

Ford's 2017 F-150

Image source: Ford Motor Company.

Another positive aspect of Ford's strong truck and SUV sales is a consistently increasing average price tag. In fact, Ford's average transaction prices jumped $2,100 last month, trouncing the industry-average gain of $500. Better still was the pricing power of its bread-and-butter F-Series truck. Sales of the F-Series jumped 12.8% to 76,027 units during May, lifting it to its best May result in 13 years, and it recorded a $3,300 increase in average transaction prices.

The Lincoln marque also continued to perform well, and increased its retail sales by 9.7% in May, the brand's 16th straight month of year-over-year sales gains. In fact, Lincoln is on pace to post its fourth straight annual sales gain for the first time this century.

A close second

General Motors also faced some adversity in May, and while Detroit's largest automaker technically sold fewer vehicles than Ford in the U.S. last month, there's more to the story -- which we'll get to in a bit. First the numbers: GM's total sales checked in at 237,364 units, down 1.3% from the prior-year result. In terms of brands, Chevrolet and GMC posted declines of 3.8% and 5.2% respectively, down to 162,950 units and 41,126 units. On the flip side, Buick and Cadillac posted gains of 28.5% and 9.2%, respectively, albeit on far lower volumes of 20,077 units and 13,211 units.

A Cadillac SUV on the street

Image source: General Motors.

It should be noted that the sales discrepancy between Ford and General Motors during May came down to fleet sales. Ford's fleet sales increased 200 basis points to 34.4% of total sales, while for General Motors, they checked in much lower, at 19.4% of total sales. That will come as no surprise to many, as Ford's fleet sales have been elevated during the first half of 2017 and will decline some in the back half, while GM has made it a priority to reduce fleet sales overall.

General Motors did take a real second place versus Ford in the pickup wars last month. Sales of GM's bread-and-butter trucks, the Chevrolet Silverado and GMC Sierra, were down a respective 2.7% and 8.2%, to 43,804 units and 16,200 units -- or a combined 60,004 units for the sister models. On the bright side, GM's average transaction prices did move higher, up more than $640 sequentially compared to April, and its incentive spending as a percentage of average transaction prices was 11.6%, lower than GM averaged in 2016.

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Ram brand soars

Fiat Chrysler Automobiles (NYSE:FCAU) remains a significant distance behind its Detroit counterparts in terms of overall U.S. sales: FCA sold 193,040 units last month, which was a 1% decline compared to the prior year. But its May results were not without bright spots. 

A couple of the positives for FCA investors were its level of fleet sales and the surge in its Ram Truck brand sales. FCA's retail sales were up 1% year over year to 152,227 units, and accounted for 79% of its total sales. That means its fleet sales sat at about 21% of total sales, a level much closer to General Motors, rather than Ford, which is a healthy sign for margins. Ram pickup truck sales jumped 16% year over year, and the Ram Truck brand sales -- which includes the Ram ProMaster and ProMaster City vans -- were up 18%.

Jeep SUV off-road

Image source: Fiat Chrysler Automobiles.

One of the brightest spots for FCA investors over the past few years has been the rapid growth in Jeep's U.S. sales. Unfortunately, that story has since cooled, and the brand posted a significant 15% decline in sales last month, down to 75,516 units. That's been the trend for much of 2017, with Jeep's year-to-date sales down 13%.

Investors also have to take these results with a grain of salt. Despite the industry remaining healthy, it's likely that automakers pushed holiday deals to help squeeze extra sales out of May, which could sap some early sales from June, leading to slightly weaker numbers this month -- stay tuned.