U.S. auto sales increase along with the consumer confidence index
U.S. auto sales jumped significantly in May, without a program like Cash for Clunkers, special tax breaks or any other government stimulus. Aided by a huge Memorial Day weekend, U.S. auto sales managed to finish the month 19 percent over May 2009. Analysts credit a rising consumer confidence index and lower gas prices for the increase in car buying. All U.S. automakers exceeded sales expectations for May, with SUVs making a comeback. Conspicuously lagging behind was Toyota, still feeling the negative effects of massive recalls earlier this year.
Car buying makes a comeback
The big increase in U.S. auto sales, like the consumer confidence index, is a leading indicator for an improving economy. The Associated Press reports that credit is loosening up for easy loans and gas prices are stable. Car buying rose despite an 8 percent decline in the stock market last month. U.S. automakers saw double-digit increases over the same month last year, when GM was headed into bankruptcy and Chrysler was already there. Foreign automakers also saw increases of 20 percent or more — except for Toyota, whose sales rose just 7 percent.
Rising consumer confidence, stable gas prices
U.S. auto sales statistics were fueled by a consumer confidence index that rose to its highest level since March 2008, according to businessweek.com, which also reports that the daily national average of gasoline prices tracked by the American Automobile Association has remained less than $3 for more than 18 months. Gas prices contributed to the comeback in SUV sales like the Chevrolet Equinox and Ford Edge. Overall U.S. auto sales rose to 1.1 million, the eighth straight monthly increase, the longest streak in almost a decade, according to Bloomberg data.
Auto sales statistics
U.S. auto sales for General Motors, the No. 1 U.S. automaker, were up 17 percent compared to May 2009. CNNMoney.com reports that GM’s sales gains were led by a 32 percent rise in sales of four of the brands that survived its bankruptcy filing: Chevrolet, Buick, GMC and Cadillac. Sales of the brands GM shed as part of its bankruptcy were down 94 percent from a year ago, although those brands now make up less than 1 percent of the company’s U.S. sales. It has less than 1,500 of those brands’ vehicles left in inventory, most of them Hummers. Ford reported a 23 percent rise in sales at Ford, Lincoln and Mercury — although it announced that Mercury will be discontinued at the end of the year. Even Chrysler posted a 33 percent sales increase — although it virtually ceased production during its bankruptcy last May.
Auto sales: room for improvement
The recent run of U.S. auto sales increases is welcome news after four consecutive years of decline in the U.S. auto market through 2009. Reuters reports that major automakers expected overall sales to be about 11.5 million in 2010. That would be up from the 27-year low of 10.4 million sales recorded in 2009.