Auto Sales to Improve in May - Analyst Blog

By Zacks.com,  June 01, 2012, 04:30:00 PM EDT

Auto sales in the U.S. are likely to improve significantly in May based on revival in demand, favorable credits and higher incentives. According to automotive information website Edmunds.com, total sales are expected to jump 31.1% to 1,391,163 vehicles in the month from last year. The website believes that the major automakers are likely to post double-digit growth in sales.

In the past few months, U.S. auto sales continued to be positively affected by strong pent-up demand with the average age of vehicles on the roads being 11 years. The automakers are increasing the incentive spending in order to boost sales further. In May, average incentive spending was $2,135 per vehicle, up 3.9% from April and 0.6% from May 2011.

Edmunds.com expects Toyota Motor Corp. ( TM ), Chrysler and Honda Motor Co. ( HMC ) to achieve market share gains while Ford Motor Co. ( F ), General Motors Company ( GM ) and Nissan Motor Co. ( NSANY ) will occupy the rest of the market during the month.

In April, U.S. saw a sluggish 2.3% growth in light vehicle sales to 1.18 million units from 1.16 million units in the same month last year. Meanwhile, it rose 9.5% to seasonally adjusted annual rate (SAAR) of 14.42 million units from 13.17 million units in April 2011.

The sluggish growth was attributable to lower sales recorded by the two big players in the industry - GM and Ford - and fewer selling days (due to more Sundays than April last year). But thanks to the fuel-efficient lineups and pent up demand that kept the auto sales recovery on track.


 
FORD MOTOR CO (F): Free Stock Analysis Report
 
GENERAL MOTORS (GM): Free Stock Analysis Report
 
HONDA MOTOR (HMC): Free Stock Analysis Report
 
NISSAN ADR (NSANY): Free Stock Analysis Report
 
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Business, Stocks

Referenced Stocks: F, GM, HMC, NSANY, TM



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