By Jordyn Grzelewski
The auto industry’s overall sales numbers for May were strong, industry analysts said.
“Despite rising transaction prices and higher fuel costs, the new vehicle market remains strong,” said Karl Brauer, executive publisher for Autotrader and Kelley Blue Book. “Consumers continue to buy trucks and SUVs at an accelerated rate, more than offsetting the ongoing drop in car sales.”
Edmunds analysts project a 3.5 percent year-over-year sales increase for May, and Cox Automotive projected a 3.1 percent increase.
Ford Motor Co. said Friday that May sales of all new vehicles in the United States rose an estimated 2 percent.
General Motors, manufacturer of the Lordstown-built Chevrolet Cruze, no longer reports its sales monthly. It plans to report second-quarter [April, May, June] sales July 3.
Analysts, however, estimated GM had a strong month as well. Cox Automotive said its forecast of an 11.7 percent year-over-year sales increase in May “came in near initial expectations.”
“We would expect GM to be up as well, based on their market share and the vehicles they’re selling and the vehicles that are doing well right now,” Brauer said on a call with reporters.
One trend analysts noted was the continued growth in SUVs, crossovers and pickups. Charlie Chesbrough, senior economist for Cox Automotive, noted the success of large crossover vehicles, which he tied to Friday’s positive U.S. employment report that 223,000 jobs were created in May and the unemployment rate fell to an 18-year low of 3.8 percent.
“The economic climate of strong job creation, coupled with low interest rates,” contributed to strong vehicle sales, Chesbrough said.
Analysts said rising gas prices (with the national average hovering around $3 per gallon) did not seem to have an effect on auto sales last month.
Brauer said gas prices could become a factor if they approach $4 per gallon. He said that type of gas-price increase likely is the only way there would be a significant shift in vehicle preferences.
“Economic indicators suggest we’ll see this trend [of strong sales] throughout the summer and fall, though talk of tariffs and the specter of $4-plus-a-gallon fuel could end the party, and inventory levels remain relatively high at several automakers,” he said.
Analysts said it is a bit early to predict the impact of the Trump administration’s planned steel and aluminum tariffs on Mexican, Canadian and European Union imports on the auto industry.
“I think we can bank on the idea the costs are going to be passed along to consumers,” Chesbrough said. “I would expect by the fall, a lot of the vehicles are going to be facing the higher tariffs in their production costs,” leading to higher prices for consumers.
Among those automakers that released sales data for May on Friday:
Ford said retail sales were 163,796, while total sales, including those to fleet customers, rose 0.7 percent to 242,824.
Fiat-Chrysler reported sales of 214,294 vehicles in May 2018, an 11 percent increase compared with sales of 193,040 vehicles in May 2017.
Honda Motor Co. reported a 3.1-percent year-to-year increase in May sales, to 153,069.
Toyota Motor Corp. said sales dipped 1.3 percent to 215,321.
Nissan Motor Co. sales last month were down 4.1 percent to 131,832.
Kia Motors America announced May sales of 59,462 vehicles, representing a 1.6 percent increase over the same period last year.
and the brand’s highest monthly sales total in 2018.
The Associated Press contributed to this report.