Auto makers on Tuesday reported higher-than-anticipated U.S. new car sales of 1.6 million in May, with burgeoning consumer demand underpinning a broader recovery in the U.S. economy.
The auto industry in May likely recorded its strongest annual sales rate since before the 2008 recession, as transaction prices remained strong and discounts did not increase.
Industry sales rose 11.3 per cent to 1,606,264 vehicles, according to a compilation of manufacturers’ results by Reuters.
The top seven auto makers beat analysts’ expectations, some by a wide margin. General Motors Co. and Chrysler Group LLC said May sales were the best for that month in seven years. Nissan Motor Co. set a sales record for May and Hyundai Motor Co. had its best month ever. Ford Motor Co. and Toyota Motor Corp. also topped forecasts.
Morgan Stanley analyst Adam Jonas said he expected the annual sales rate in May would finish at 16.6 million vehicles. That would be the highest rate since February, 2007, when it was 16.77 million.
“Industry sales in May soared as consumer confidence improved and demand for new vehicles continued to strengthen,” said Bill Fay, group vice-president of Toyota Motor Sales USA.
A record number of recalls at GM since the first of the year did not crimp demand for the auto maker’s new vehicles.
GM’s May sales were up 12.6 per cent to 284,694 vehicles, well above the consensus of nine analysts polled by Reuters. All four GM brands reported sales increases, with gains at Chevrolet and GMC driven in part by strong demand for new full-size utility vehicles and pickups.
Ford said May sales rose 3.0 per cent to 254,084 vehicles. Chrysler was up 16.7 per cent to 194,421. Toyota climbed 17.0 per cent to 243,236; Honda, up 9.0 per cent to 152,603; Nissan, up 18.8 per cent to 135,934; and Hyundai-Kia up 8.5 per cent to 130,994.
The U.S. auto industry experienced a third successive month of strong sales after cold and snowy weather pressured results in January and February. Analysts polled by Reuters had expected May industry sales to rise about 7 per cent.
Monthly auto sales are an early snapshot of consumer demand for big-ticket items. U.S. new-car sales in April rose 8 per cent and the annual selling rate finished at 16.04 million vehicles.
Specific indicators in May were mixed. Sales of full-size pickup trucks rose 17.2 per cent at Chrysler and 9.5 per cent at GM. At Ford, sales of the best-selling F-series pickup fell 4.3 per cent, with the auto maker trimming discounts on 2014 models as it readies the launch this summer of a redesigned, aluminum-intensive 2015 F-series.
The average transaction price for a new vehicle in May was $32,307 (U.S.), according to research firm Kelley Blue Book, which said average new-car prices were up $653 from a year ago, but down slightly from April.
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