DETROIT — (WWJ) May car and truck sales hit a new post-recession high in May, with an annual sales rate approaching 17.8 million. That’s a number that hasn’t been seen in a decade.
“I think we are going to see analysts upgrade their forecast,” said AutoTrader.com analyst Michelle Krebs.READ MORE: Stimulus Check Latest: Will You Get A Fourth Relief Payment?
We’re seeing good deals, solid products, low interest rates and relatively low gas prices. All of these factors, Krebs says, should lead to strong sales through the summer.
“All of the things are in place to make this a strong market.”
The year-over-year sales numbers are distorted because there was one fewer selling day this year, and May of 2014 was very strong. So, any gain is an accomplishment, and two of the three domestic brands posted gains.
Fiat-Chrysler lead the “Detroit Three” with a four percent gain, it’s 62nd consecutive monthly sales increase.
“Our dealers enjoyed brisk business throughout the Memorial Day weekend,” said Chrysler spokesman Ralph Kisiel. “They tell us the hectic pace over the holiday weekend carried over to this past weekend as well.”
While Fiat sales were weak, the other brands had a very strong month.
“Our Jeep brand continues to set records with its best monthly sales ever in May, helping us to achieve our 62nd-consecutive month of year-over-year sales increases,” said Reid Bigland, Head of U.S. Sales. “Despite one less industry selling day this May versus a year ago, we posted a 4 percent sales gain and exceeded the 200,000-unit threshold for the first time since March 2007.”
GM sales rose 3 percent, beating analysts expectations. The company’s retail sales rose 7 percent in May, on the backs of strong pickup and crossover sales.READ MORE: Unemployment In Michigan: 30,816 New Jobless Claims Filed Last Week
GM’s Jim Cain is looking forward to a good summer.
“We feel really good about the direction of the economy. There are more people working. Their incomes are steady.”
Ford sales dropped one percent, but that was still a solid showing.
“We continue to see strong consumer demand for our newest products, including Edge, F-150, Mustang, Transit Vans and Lincoln MKC,” said Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service. “Our all-new F-150 is still turning on dealer lots in 26 days against tight supply, and F-150 average transaction prices set a record in May, as customers continued buying a rich mix of high-series pickups.”
Nissan sales were also down one percent. Toyota sales were flat. The new Golf helped push Volkswagen sales up eight percent over a weak May of 2014.
Among the other reasons for the industry’s strong performance, lower interest rates.
“Car buyers continue to pay more for vehicles and mitigate that cost with longer loan terms and low interest rates. Average new vehicle loan terms continue to inch up. The average new vehicle loan term was 67.9 months in May, the highest ever.The average new vehicle loan APR fell to 4.6% in May from 4.8% in April. With available longer loan terms, lower interest rates and abundant lease deals, people really are getting get more car for the money.”
As analysts review their sales projections, Kelley Blue Book’s Karl Brauer says if current trends continue, it’s a long shot, but 2015 could be an historic year for the car industry.
“If these conditions hold throughout the year, we could theoretically hit an annual sales number higher than the record 17.3 million new vehicles sold in 2000.”MORE NEWS: If Kids Are Able To Get COVID Vaccine, Health Department May Re-Evaluate Michigan’s Re-Opening Plan
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