Chicago---US auto sales accelerated in May to their fastest pace since 2005 as easy credit and low fuel prices lured buyers into showrooms, industry data showed Tuesday.
Total industry sales rose 1.6 percent compared with May 2014 while the sales pace came in at an adjusted, annualized rate of 17.9 million vehicles, according to Autodata.
That's up sharply from a pace of 16.5 million in April and the highest rate since employee pricing incentives at the Detroit Three pushed the pace to 20.1 million in July 2005.
While the sales pace was slightly inflated by a quirk of the calendar -- there were five weekends this May along with the Memorial Day holiday -- analysts said it remains good news for automakers and the economy as a whole.
"This illustrates the underlying strength of our industry," Ford economist Yong Yang said in a conference call.
"As the economic conditions continue to improve throughout 2015, we expect this strong industry performance will be solidified."
Given rising housing prices, a strong stock market, low interest rates and ongoing pent-up demand, 2015 sales could surpass the record 17.3 million new vehicles sold in 2000, said Karl Brauer, senior analyst for Kelley Blue Book.
And automakers ought to be able to turn a healthy profit as consumers open their wallets for upgrades and pricier models.
"With the national average price of gasoline down nearly a dollar per gallon on average from one year ago, truck and SUV demand remains strong, elevating average transaction prices, especially for domestic automakers," Brauer said.
"We also saw incentives spending remain nearly flat in May, which shows the strength of the overall new-car market."
Dealers took advantage of the early Memorial Day weekend to boost advertising and "consumers clearly responded," said Jessica Caldwell, an analyst with car shopping website Edmunds.com.
"We saw a good number of zero-percent (financing) deals throughout the month, Caldwell said. "Eased credit conditions continue to make it attractive for car buyers looking to finance their purchase."
General Motors posted its best May since 2007 as sales rose three percent to 293,097 vehicles.
Chrysler posted its best May results since 2005 as sales rose four percent to 202,227 units.
Ford sales declined one percent to 250,813 when compared with May 2014, but the second largest US automaker said demand was strong for its newest products.
AFP
