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Higher gas prices cut into demand for sport utility vehicles and trucks in May, depressing U.S. market share for the Big Three Detroit-based automakers and prompting production cuts at General Motors Corp. and Ford Motor Co.
Reuters reported that GM, the world’s largest automaker, posted a 16% slide in monthly sales, while Ford reported a 6% drop. Chrysler Group’s sales fell 11% before adjusting for the extra selling day last month compared to a year earlier.
By contrast, Japan’s Toyota Motor Corp. and Honda Motor Co. Ltd. posted record sales for May, gaining 12.3% and 11.4%, respectively. Both cited booming sales of passenger cars and a boost from increasing U.S. consumer concern over fuel economy.
“The overall industry in May was dampened by rising fuel prices and interest rates,” Mark LaNeve, GM’s North American chief of sales and marketing, said in a statement.
GM saw sales of both cars and trucks decline as it held back on consumer incentives and curbed unprofitable sales to daily-rental car companies.
U.S. automakers, which have relied on sport utility vehicles and large cars to generate profits, have been hit by consumers looking to downsize their vehicles from SUVs to smaller and mid-sized cars, a segment dominated by Japanese automakers.
Toyota-branded passenger cars rose almost 20% in May and Honda saw a 16% increase in its car sales.
GM and Ford, both struggling to slash costs and payrolls, pointed to sales gains for most of their new vehicle models.
Ford’s May U.S. sales decline was more limited than most analysts’ estimates because of increased demand for the automaker’s new cars, including the popular Mustang and Fusion sedans.
GM said sales of its new vehicles – including the Chevrolet Tahoe, Impala, HHR and Cobalt – accounted for almost a quarter of its total sales in May.