Spin Notwithstanding, U.S. Auto Sales Still Awful in May

U.S. auto sales were truly horrible again in May, yet many media outlets today are crowing about an "uptick," and the "best sales so far this year."

Month in and month out, the car companies "accentuate the positive, and eliminate the negative" when they report sales. You can't really blame them, but month in and month out, the so-called watchdog media buy it.

"Boost in car sales mirrors global rise," said the Financial Times. "New-Vehicle Sales Reach A 2009 High," said The New York Times. I went to bed last night thinking car sales were awful. When I saw those headlines this morning, I thought I must have missed something.

At least, The Wall Street Journal was less of a cheerleader. Its headline said, "Car Sales Show Signs of Stabilizing." Even that's reaching for a silver lining.

In fact, U.S. auto sales fell 33.7 percent in May from the year-ago month. GM sales were down 28.7 percent; Ford, down 24.2 percent; Chrysler, down 46.9 percent, according to AutoData Corp.

It's hard to see much a pattern with regard to consumer reaction to Chrysler and GM declaring bankruptcy. True, sales for Chrysler, which declared bankruptcy at the end of April, were worse than Ford or for GM, which declared bankruptcy June 1. But U.S. sales were also down 40.7 percent for Toyota in May. Honda fell 41.5 percent. Nissan fell 33.1 percent.

Ford's positive spin was that Ford achieved its highest market share in three years. According to AutoData, Ford's U.S. light-vehicle share was 16.8 percent in May, up from 14.7 percent in the year-ago month. You have to hand it to Ford. Their market share gain is somebody else's loss. But it's also fair to point out that year to date, Ford's market share is flat, at 15.1 percent, according to AutoData, and that its unit sales year to date are down by 36.5 percent.

And while it's mathematically accurate to say that May sales were the best so far this year, that's not saying much. It's also in line with typical seasonal sales patterns. The car companies made much of the fact that May sales were 13 percent above April sales, but that's a fairly typical, seasonal increase from April to May.

The Seasonally Adjusted Annual Rate for May, usually called the SAAR, was 9.91 million, according to AutoData. That's an estimate based on sales history, for how many cars and trucks the U.S. industry would sell in a year at the current monthly sales pace. True, the May figure was the highest SAAR so far this year, but it's really not a significant increase over March, at 9.86 million. And in between, the April SAAR fell to 9.32 million.

So it's a stretch to call the May result an improvement, except in the sense that at least U.S. auto sales didn't get much worse.