Major automakers recorded double-digit U.S. sales gains in May from depressed year-earlier levels as industrywide sales ticked up for a seventh consecutive month with a boost from orders by rental agencies.
The May auto sales results provide one of the earliest snapshots of consumer demand for a month marked by financial market volatility and renewed questions about the strength of the U.S. economic recovery in the second half of the year.
Ford Motor Co. posted a 22 percent sales gain and raised its second-quarter production target by about 2 percent. Its shares were up 3.6 percent at $11.82 on the New York Stock Exchange on Wednesday afternoon.
GM's overall sales were up 17 percent from sales a year earlier that came just as the top U.S. automaker was sliding toward a U.S.-government funded bankruptcy.
Chrysler, which was already operating in bankruptcy last May, reported a monthly sales gain of 33 percent.
Nissan Motor Co. reported a 24 percent sales gain but said the past month was marked by a renewed sense of caution by consumers still anxiously watching the job market and housing prices.
"The month of May seemed to me to mark the return of some bad economic news," said Al Castignetti, who heads Nissan brand sales in the United States.
Major automakers said they expected industrywide sales to be around 11.4 million vehicles on an annualized and adjusted basis in May.
That would be up from the 11 million vehicle sales rate that had held from January through April, and up from the 27-year low of 10.4 million vehicle sales recorded in 2009.
But the retail component of industrywide sales was expected to be near 8.8 million vehicles in May, down slightly from 8.9 million in April, a GM representative said.
Both GM and Ford said that a preliminary reading of industrywide demand pointed toward a continuing but grudging recovery from the collapse that hit the industry a year ago.
"We had never expected a V-shaped recovery," said GM U.S. sales chief Steve Carlisle.
GM said its May results pointed toward the initial success of its turnaround plan in the year since it filed for Chapter 11 bankruptcy protection in June 2009.
The automaker is aiming for an initial public offering as soon as this year to reduce the U.S. government's ownership stake of nearly 61 percent. Sales of the four brands kept by the reorganized GM — Chevrolet, Cadillac, Buick and GMC — were up 32 percent in May.
The GM sales gain came despite any substantial increase in the kinds of costly incentives — including zero-percent financing — that GM had relied on to boost sales and support production before bankruptcy.
In a sign of the automaker's success in holding the line on pricing, GM said its average vehicle transaction price was up $3,300 in the year to date compared with an industry-wide price increase of just $1,600.
Those price increases have come because of stronger sales for newer vehicles like the Chevy Equinox crossover and the Camaro sports car, GM said.
GM's sales through showrooms were up 11 percent in May from a year earlier. The remainder of the gain came from sales to fleet operators, including rental agencies.
That category of fleet sales, which is considered less profitable than retail sales, represented about 38 percent of GM's total sales in May.
In May, the S&P 500 index .SPX fell more than 8 percent in its worst monthly slide since February 2009 as investors reacted to the threat that the European debt crisis could trigger a renewed slowdown in the U.S. economy.
GM's Carlisle said the automaker did not expect the market decline to point to another drop in the U.S. auto market, which declined for four consecutive years through 2009.
"Recently we've all witnessed significant volatility in the financial markets," Carlisle said. "While that volatility's been significant, we don't think it signals another collapse of the global economy or the vehicle industry."
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