Gordy O'Connor and his wife Pat of Lake Orion look at a 2014 Cadillac ATS with salesman Jonathan Tournaud at LaFontaine Cadillac Buick GMC. (Charles V. Tines / The Detroit News)
Detroit automakers all posted May sales gains that beat analyst expectations, as consumers took advantage of five shopping weekends and Memorial Day specials and hit showrooms in force at the end of the month.
General Motors Co., deep into a recall crisis, had year-over sales gains of 12.6 percent, a further sign that the bad news not significantly kept buyers away from showrooms.
Chrysler Group LLC’s 16.7 percent sales gain led the way, followed by GM’s sales 12.6 percent and Ford Motor Co.’s 3 percent boost from the same month a year ago. Automakers across the industry benefited from growing truck, SUV and car sales. Shoppers bought nearly 1.61 million vehicles in May, up 11.4 percent from the same month in 2013.
The seasonally adjusted annual rate of vehicle sales hit 16.77 million in May, up from 15.48 million a year ago and hit the highest level since February 2007, according to Autodata Corp.
An extra weekend, holiday specials, easy financing, stable gas prices and continued pent-up demand helped drive demand, Kelley Blue Book senior analyst Karl Brauer said.
“We have still kind of a recovery from the cold of the early months of the year,” he said in an interview. “You’re still getting the rebound effects from the sales that were delayed in January, February and into March.”
GM sales of 284,694 vehicles in May marked its best May in seven years and best month since August 2008, as GM grew market share 0.2 percentage points to 17.7 percent. The Detroit automaker was aided by strong car sales, a 14.2 percent sales jump for Chevrolet vehicles, higher sales to retail consumers and a higher-than-expected 21 percent gain in fleet sales. GM warned its fleet sales will be down sharply in June.
Analysts say GM’s May sales performance — followed by sales increases it posted in March and April in the height of the ignition-switch recall issue — indicate consumers aren’t fazed by the automaker’s record 30 recalls this year, including many announced in May. The company also told dealers to stop selling some popular SUVs late in the month due to recall problems.
Barclays Capital Inc. analyst Brian A. Johnson in a Tuesday research note said GM sales were better than anticipated, “helping to further put to rest investor concerns that the recall publicity would hurt in the showrooms.”
“Some of the recall stuff could have been a sales opportunity” for GM, Edmunds.com analyst Jessica Caldwell said.
Chrysler continued its sales momentum in May, selling 194,421 vehicles and posting its best May since 2007. The Jeep, Dodge, Ram and Fiat brands posted sales gains, led byJeep’s 58 percent surge to more than 70,000 sales in the month. Chrysler-brand sales fell 22.3 percent with the end of 2014 Chrysler 200 sedan and convertible production; the new 2015 Chrysler 200 began arriving at dealerships in May with more expected in July.
“Our Jeep sport utility vehicles and Ram pickups continued to do well in May as our dealers reported brisk May sales,” Reid Bigland, Chrysler’s head of U.S. sales, said in a statement. “For the third consecutive month, our Jeep brand recorded its best sales month ever, helping Chrysler Group to achieve its 50th consecutive month of year-over-year sales gains.”
Ford sold 253,346 vehicles, as Fusion and Escape set sales records. Ford’s popular F-Series truck sales fell 4.3 percent year-over-year. John Felice, Ford vice president of U.S. marketing, sales and service, said the automaker could have sold more pickups if it had boosted incentives; but it is building truck inventory to get it through 13 weeks of production downtime at truck plants as it transitions to the 2015 Ford F-150, featuring an aluminum body, late this year. That downtime will cost the automaker production of more than 90,000 trucks, eating into profits and market share on trucks this year, Joe Hinrichs, Ford’s president of the Americas, told reporters this week.
“We’re going to be managing the business toward this transition, toward our profitability as a business and making sure we’re appropriately managing this long sell-down,” Felice said.
Nissan Motor Co. set a May sales record, with sales rising 18.8 percent, while Hyundai Motor America and Kia Motors America both posted their best sales months ever. American Honda Motor Co.’s sales rose 9 percent and Toyota Motor Sales U.S.A. Inc. said its May sales jumped 17 percent, as Camry sales increased 26 percent to more than 49,500.
Bill Fay, Toyota division group vice president and general manager, said this past weekend was Toyota’s second best non-holiday sales weekend in the last six years.
Sales of the Volkswagen brand fell 15.4 percent in May, despite increased traffic from consumers and more sales over the last two weekends of the month. The company said launches of the Golf and Golf GTI will help heading into the summer.
“They need new product,” Brauer said.
Analysts and automakers expect June sales won’t keep pace with May, which is typical, but say the industry is poised for new auto sales topping 16 million for the year.
Fay said the industry appears poised for good car sales this summer.