U.S. light-vehicle sales increased 1.6% year over year to 1.63 million units in May. This is a record high for May sales.
Sales on a seasonally adjusted annualized rate (“SAAR”) basis surged to 17.78 million units in May 2015, increasing from 16.52 million in Apr 2015 and 16.73 million in May 2014. This is the highest SAAR since Jul 2005.
The impressive sales volume was driven by strong demand for light trucks, along with crossovers and SUVs. These vehicle segments have been gaining from low gas prices as well as the easy availability of credit with lower interest rates and longer repayment periods. Attractive Memorial Day deals acted as catalysts, boosting May sales further.
Among the six major American and Japanese automakers, FCA US (formerly Chrysler Group) recorded the maximum year-over-year improvement in May 2015. Meanwhile, General Motors Company GM led in absolute figures for the month.
Now, let us look at the U.S. sales figures reported by individual automakers.
U.S. Automakers
General Motors recorded 293,097 vehicle sales in May, marking a 3% year-over-year improvement. This is the company’s best May sales since 2007. Retail sales improved 7%, while commercial deliveries were up 5%.
Ford Motor Co. F reported a 1% decline in U.S. sales from the year-ago period to 250,813 vehicles in May 2015. Sales volume of the Lincoln brand vehicles improved 3.7% year over year to 9,174 units in the month.
FCA US LLC – controlled by Fiat Chrysler Automobiles FCAU – recorded a 4% year-over-year rise in sales to 202,227 vehicles in May 2015. With this, the company’s monthly sales have increased year over year for 62 consecutive months. This impressive feat also marks the best May sales for the group since 2005.
Japanese Automakers
Toyota Motor Corp.’s TM sales dropped 0.3% year over year to 242,579 units in May 2015. The decline was due to one less selling day in May 2015 compared with May 2014. Adjusting for this, sales increased 3.6% on a daily selling rate (“DSR”) basis. Sales in the Toyota division fell 1.6% on volume basis, but improved 2.2% on DSR basis to 212,908 units. Lexus’ sales rose 10.2% on volume basis and 14.5% on DSR basis to 29,671 units.
Honda Motor Co., Ltd. HMC recorded a 1.3% year-over-year rise in sales on volume basis and 5.2% on DSR basis to 154,593 vehicles in the month. Sales of cars amounted to 79,850 units in May, while sales of trucks were 74,743 units.
Nissan Motor Co. Ltd. NSANY reported a 0.8% year-over-year decline in sales to 134,779 vehicles in May. Sales in the Nissan division also declined 1% to 124,305 units. However, sales of the Infiniti Division went up 0.9% to 10,474 units.
Outlook
Automakers are gaining from low fuel prices and interest rates, rising wages and household wealth, and improving job security. Further, ongoing recovery in the U.S. economy is leading to an improvement in overall consumer confidence.
Automakers are also aiming to increase market share by offering large incentives and discounts to customers. Additionally, banks are offering more car loans with lower interest rates and longer repayment periods. Further, the high average age of cars on U.S. roads is resulting in high replacement demand for cars as well as car parts.
All these factors are working in favor of auto sales in the U.S. As the automobile industry is a major contributor to U.S. economic growth, improving auto sales should help in the recovery of the overall U.S. economy.
The outlook for long-term auto sales remains positive due to improving macroeconomic factors, residual pent-up demand, attractive deals and vehicle launches. U.S. light-vehicle sales look set to drive past the 17 million mark in 2015.
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