Detroit New car buyers looking for a bargain this summer may have to wait.
Dealers usually offer discounts during the warmer months to clear out older models, but cars are in short supply this year because of the Japan earthquake and other factors. The lack of vehicles, especially some popular fuel-efficient models, contributed to a steep sales decline in May, the first monthly decrease this year.
The trend is likely to persist for the next several months. And although Toyota announced a new round of incentives Wednesday, most analysts don’t expect many good deals until the end of the summer. Some are advising people to delay their purchases.
“If you don’t have to buy, wait until fall. If you lease a car, extend it,” said Edmunds.com chief Jeremy Anwyl.
Consumers heard that message in May. There were just over 1 million cars and trucks sold in the month, down 8 percent from April and 4 percent from last May.
Automakers say they are not worried about a reversal in the industry’s recovery, despite a raft of bad economic data in the last few days. Once inventories are back to pre-earthquake levels and the deals come back, buyers will return, they say.
Even with the latest decline, auto sales are up 14 percent so far in 2011.
Ford Motor Co. and General Motors Co. are sticking with annual forecasts of around 13 million vehicles in U.S. sales. That’s far short of the 2000 peak of 17.3 million, but better than the 10.4 million trough in 2009.
Ford is so bullish on the recovery that it increased third-quarter production by 8 percent over last year. Its chief economist, Ellen Hughes-Cromwick, said there was good economic news with the bad, including moderating gas prices, consistently low interest rates and better availability of loans.
But in May, the bad news prevailed. Toyota, Honda Motor Co. and Nissan Motor Co., all of which ran short of models due to parts shortages caused by the earthquake, had the biggest sales declines. Toyota was down 33 percent, Honda 23 percent and Nissan 9 percent from last May.
GM’s sales dropped 1.2 percent, as falling pickup truck sales offset strong sales of more fuel-efficient cars and crossovers. It was the same story at Ford, which saw sales fall 2.4 percent for the month. Pickup sales dropped more than 10 percent at both companies, the victim of high gas prices and a weak construction industry.
Fuel economy was clearly driving sales, with small car sales showing particular strength. For the first time in decades, Ford sold more F-150s with V6 engines than it did with larger, less efficient V8s.
Automakers usually use the warmer months to cut deals and make way for new models in the fall. But this year, they don’t have many vehicles left. At the same time, automakers are raising prices to make up for the higher price of steel and other commodities.