Chrysler May Outsell Toyota, Honda & Nissan This Month

The Chrysler Town & Country is fueling Chrysler Group sales.

When it comes to auto trends, monthly sales are a huge determinant in just how well any car manufacturer is performing. In recent years, Subaru, Hyundai and Kia have consistently seen its sales rise even in the teeth of the Great Recession.

May Sales Shake-Up

U.S. auto sales for May 2011 will have General Motors finishing on top followed by the Ford Motor Company, but the third spot, most recently held by Toyota Motors, is up for grabs. That’s because Toyota, like Honda and Nissan, is still trying to recover from the devastation following March’s earthquake and tsunami disaster. This presents a big opportunity for other automakers to move up, grabbing market share at the expense of the Japanese manufacturers.

Third place for the month may go to the Chrysler Group or, if you like to combine Hyundai/Kia sales, to the Koreans. According to TrueCar.com, one of a handful of sources that forecasts new and used auto sales, overall sales for the month will fall by about 4 percent compared with May 2010.[1] Much of that decrease will come because of decreased manufacturing output in Japan which has affected the global market.

Grabbing market share is the goal of every automaker and Japan’s misfortunes are presenting a unique and likely temporary opportunity for competing brands. Affected Japanese manufacturers expect production levels to return to normal by the end of the year, with significant improvements seen later this summer. Still, car manufacturers may be able to win over customers from competing automakers, and perhaps win them for the long term. Other, loyal customers may decide to wait out the current supply problem which has made some cars including the Toyota Prius and Toyota Yaris, hard to get.

Supply Problems

Although opportunity is available for Chrysler, Hyundai and Kia, to pick up sales, all three automakers have to battle through some problems to meet customer demand. Chrysler’s problem is that it doesn’t have enough fuel efficient models to meet what customers are looking for today with gas prices nearing $4 per gallon. It’s most fuel efficient vehicle is the Dodge Caliber, and it gets 32 mpg on the highway. Hyundai and Kia have many models that get at least 35 mpg, with some hitting 40 mpg.

Hyundai and Kia have a problem that Chrysler does not have: tight manufacturing capacity, at least in North America. The Korean companies operate just one plant each in North America, located in Alabama and Georgia, respectively. Both plants are operating at full tilt, likely to force the company to export certain models from South Korea that are built here. The Hyundai Elantra and Hyundai Sonata are built and sold here as is the Kia Optima and Kia Sorento. When Hyundai needed more capacity, it moved its Santa Fe crossover to Kia’s facility.[2]

For now, everyone is selling what they have with even the Japanese 3 finding a way to make do with current inventories. For consumers, even better incentives seem likely as everyone battles it out for market share.

References

[1] TrueCar; TrueCar.com Forecasts New and Used Auto Sales; Incentives Spending for May 2011; May 25, 2011

[2] Autoweek; 2011 Hyundai Santa Fe to Join Kia Sorento at Georgia Factory; Greg Migliore; August 31, 2010