U.S. auto sales bounce back with big May gains
Detroit • Price cuts at Nissan and strong demand for pickup trucks helped U.S. auto sales rebound in May after a slight dip in April.
General Motors reported its strongest monthly sales since September of 2008. Chrysler, Ford, and Toyota also reported increases. Nissan Motor Co. notched its highest May sales ever after cutting prices on seven popular models early in the month. Only Volkswagen said sales fell compared with May of last year.
The strong sales are another sign that auto sales will continue to boost the U.S. economy, as consumers replace aging vehicles and businesses invest in trucks as they gain confidence.
Builders are buying pickup trucks at a rapid pace as home construction continues to rebound. Ford Motor Co. said sales of its F-Series pickup the nation's best-selling vehicle hit 71,604, their highest sales since March 2007. Chrysler Group said Ram pickup sales jumped 22 percent from last May to almost 32,000. Chevy Silverado sales rose 25 percent to more than 43,000.
Analysts expected a strong May for the industry after a slightly disappointed April. They forecast a 7 percent increase over May 2012 to around 1.4 million vehicles, putting the industry back on pace for full-year sales of more than 15 million.
In April, the annualized rate dropped below 15 million for the first time in six months, causing some concern that the industry's recovery could be slowing.
"This quick rebound is just another example of how the auto industry is currently one of the most resilient areas of the overall economy," said Jessica Caldwell, a senior analyst at car-shopping site Edmunds.com.
Chrysler even predicted that May sales would hit an annual rate of 15.5 million.
Truck sales, combined with increases in other vehicles, show that the economic recovery is sticking, said Kurt McNeil, GM's vice president of sales.
"These are all powerful signs that the gradual recovery in the economy is becoming more broad-based," he said in a statement.
Here's the breakdown of how the market's key players performed in April:
Detroit automakers • General Motors Co. sales rose 3 percent thanks to the continuing strength of the Chevrolet Silverado pickup. Sales of the Buick Verano, Chevrolet Cruze and Chevrolet Sonic small cars all rose by double digits. Cadillac brand sales rose nearly 40 percent. But Buick sales fell 3 percent, and sales of the Impala full-size car and Malibu midsize sedan plummeted more than 30 percent.
Ford sales rose 14 percent in May as the F-Series rose 31 percent. Other strong sellers included the Ford Fusion sedan, which gained 10 percent, and the Ford Escape, which was up 26 percent. Ford sold more than 29,000 Escapes, the highest monthly total since the small SUV's introduction 13 years ago. Lincoln brand sales were flat. Ford plans to increase third-quarter North American production 10 percent to 740,000 vehicles. Second-quarter production is unchanged at 800,000.
Chrysler sales were up 11 percent on strong demand for the Ram and Jeep Grand Cherokee SUV. It was the company's best May sales in six years. The figures surprised some analysts who had expected a sales decline.
Japanese automakers • Nissan sales gained 25 percent over a year ago. The total of 114,000 set a company record for May. Analysts expected a big month after Nissan cut prices on seven models. Sales of the Altima midsize sedan rose 41 percent, while sales of the redesigned Pathfinder SUV more than quadrupled. Nissan sold 2,100 Leaf electric cars, the best month since the car hit the market two years ago.
Toyota sales rose 2.5 percent in May to almost 208,000. The company said warmer weather and excellent Memorial Day sales drove up the total.
Others • Volkswagen sales fell 1.7 percent, with sales of all models falling but the Jetta, Beetle, Passat and Tiguan.
Memorial Day offers such as Chevrolet's $500 cash rebate on top of other discounts also juiced sales, Kelley Blue Book analyst Alec Gutierrez said.
But beyond Nissan and holiday bargains, automakers pushed prices higher and reduced discounts last month because of strong demand, according to the car-buying site TrueCar.com. The average vehicle in the U.S. sold for $30,978 last month, a 2 percent increase from May of last year, the company said. Automakers cut incentives such as rebates and low-interest loans by 3 percent to an average of $2,482 per vehicle, TrueCar figures show.