Analysts Predict Slow Sales in May
With automakers scheduled to release their May sales figures on June 1, analysts have predicted that numbers will be low compared to the surprisingly strong sales in April.
With automakers scheduled to release their May sales figures on June 1, analysts have predicted that numbers will be low compared to the surprisingly strong sales in April.
These predicted low sales could mean continued production cuts at General Motors Corp. and Ford Motor Co. In a research note to investors, Burnham Securities analyst David Healy said the reduction in May sales can be attributed to increased gas prices, rising car loan rates and weak consumer confidence.
Car prices also increased, due to the reduced spending on buyer incentives by Ford, GM, and DaimlerChrysler AG's Chrysler Group. Vehicle prices that dropped 1.9 percent in 2003 have bounced up 1.8 percent since September, Healy said.
Analysts believe the domestic Big Three will see lower sales rates because of the drop in the popularity of SUVs and an aging vehicle line-up, while the Asian Big Three -- Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. -- will probably see a 5-percent sales increase, partly due to the rise in their spending on incentives.
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