U.S. Car Sales Cap Off May With a 2.3% Gain : Automobiles: The increase adds up to the healthiest sales month dealers have seen in nearly a year.
Sales of domestically built cars rose 2.3% in late May above a strong period a year earlier, capping off the most robust sales month the auto industry has seen in nearly a year.
The pace of car and truck sales has edged up slightly each month since January, but the surge in the last 20 days of May appears to herald the start of a stronger and faster recovery than the industry has experienced thus far.
“Until now, auto sales were a weak link in the recovery,” said Tom Webb, chief economist for the National Automobile Dealers Assn. “But I look for sales to improve from here on out and for production to step up in the third quarter.”
On a seasonally adjusted basis, the pace of U.S. car sales during the last 10 days of May came to 6.5 million, down slightly from 6.7 million in mid-May.
But together, the two periods were the best in a year and a half of depressed sales.
For the whole month, sales of imported and domestic cars and trucks climbed to 12.9 million from 12.6 million in April. The seasonally adjusted annual rate is a reflection of the number of vehicles that would be sold if May’s sales pace were to continue for a full year. In a non-recessionary year, the industry sells about 15.5 million vehicles.
The continuing pickup in the auto market and the U.S. economy as a whole has helped to allay fears that the most recent swell in sales volume would recede--as has been the pattern throughout the last two years. A sales blip last spring raised hopes that the recovery was on its way, only to fizzle as consumer confidence plunged again in August.
The recovery so far has been fueled by sales of light trucks. While there was some evidence that the upturn was spreading to passenger cars in May, truck sales still lead the way with a 13.5% increase over the year-earlier period, compared to a nearly even showing for car sales.
The growing preference of American consumers for trucks--a designation that includes minivans and sport utility vehicles--has put the Japanese manufacturers at a disadvantage.
They hold only about 13% of the U.S. truck market, compared to nearly 30% of the car market. And several Japanese makers , bowing to political pressure in the United States and economic pressure at home, increased prices on their car lines earlier this year.
As a result, the Japanese share of the total market has declined for three consecutive months. The Big Three have benefited from their competitors’ decline: U.S. manufacturers gained 3.2 percentage points compared to May, 1991, to capture 73.7% of the total U.S. market in May.
Despite such indications that the industry is returning to good health, California dealers say they are still waiting to partake in the budding recovery.
“I went to a meeting in Texas with 20 dealers from around the country last week,” said Don Valley, owner of Valley Mazda-Hyundai in San Luis Obispo. “You could have walked into the room and picked out the four California dealers just by their faces--sullen, quiet, depressed.”
Auto Sales Up Over Last Year
Sales of domestically built cars rose 2.3% in late May above a strong period a year earlier. These are the seasonally adjusted annual rates for all vehicles sold in the United States. Domestic figures include cars and trucks built in the United States by Japanese auto makers. The figures use seasonal patterns to predict the auto industry’s sales rate over a full year.
1991
MAY: 12.4
JUN: 12.9
JUL: 13.1
AUG: 12.6
SEP: 13.3
OCT: 12.0
NOV: 12.5
DEC: 13.2
1992
JAN: 11.8
FEB: 12.5
MAR: 12.5
APR: 12.6
MAY: 12.9
Source: U.S. Department of Commerce
