May auto sales grow but still miss estimates
Car buyers seemed unfazed by the souring economy, leading to sales gains that, while strong, largely fell short of expectations.
Auto sales continued to rise in May, but growth didn't meet expectations as the economy sputtered.
While automakers largely missed estimates, they still had plenty to celebrate, including double-digit sales gains. General Motors' (GM) U.S. sales grew by 11% to 245,256, and its share price rose nearly 1% to $22.36 after it announced a plan to lower pension obligations by offering buyouts. Analysts' growth estimates ranged from 11.4% to 15%.
Ford (F) sales rose 13% to 216,267 and saw its share price drop nearly 4% to $10.14. Analysts had expected Ford to post gains of between 12% and 16%.
Chrysler said sales rose 30% to 150,041, missing the 40% gain estimated. And Toyota (TM) had the biggest gain of all, a 73% increase to 202,973. Still, analysts were expecting a slightly larger increase. Toyota sales were hit hard a year ago as company reeled from the earthquakes and tsunami in Japan. Toyota shares were down 2.6% Friday to $74.91.
Overall, the industry's sales rate on light vehicles did not meet the 14.4 million that analysts had expected on an adjusted annualized basis. The rate came in at 13.8 million units, according to industry tracking firm Autodata, up from 11.7 million a year earlier. Total unit deliveries rose 25.7% from a year earlier and 12.7% from April 2012.
Perhaps analysts set projections too high, given the state of the economy in May. Just 69,000 new jobs were created, down from 77,000 in April and 143,000 in March. The unemployment rate notched back up to 8.2%.
With those disappointing numbers, the fact that auto sales grew at all -- much less by double digits -- is impressive. Analysts told The Associated Press that pent-up demand for new cars and trucks is trumping concerns about the economy.
"Weak news on the economic front did little to deter shoppers in May, although if the pace of the economic recovery slows any further, we could see a dip in the pace of auto sales recovery," said Alec Gutierrez, a senior market analyst for Kelley Blue Book.
Vehicles on U.S. roads are nearly 11 years old, on average.
The major U.S. automakers offered car buyers plenty of incentives, which helped drive sales. Chrysler, for example, allowed some buyers to put off payments for 90 days, Bloomberg reported. GM offered big rebates for trucks and SUVs.
Here's how the automakers fared:
Vehicles sold: 245,256
Change from a year earlier: 11% gain
Of note: Sales of small and compact cars were up 16% from a year earlier.
Vehicles sold: 216,267
Change from a year earlier: 13% gain
Of note: A 29% gain for the popular F-Series pickup
Vehicles sold: 202,973
Change from a year earlier: 73% gain
Of note: The new Camry and Camry Hybrid led passenger car sales
Vehicles sold: 150,041
Change from a year earlier: 30% gain
Of note: The Jeep Wrangler and Dodge Challenger each set monthly sales records.
Vehicles sold: 133,997
Change from a year earlier: 47.6% gain
Of note: Civic sales up more than 80% compared to May 2011.
Vehicles sold: 91,794
Change from a year earlier: 20.5% gain
Of note: Strong showing from fuel-efficient models, including the Versa, Juke and Rogue.
Vehicles sold: 51,771
Change from a year earlier: 7.4% gain
Of note: Nearly 80% of sales were cars that beat 30 mpg on the highway.
Vehicles sold: 38,657
Change from a year earlier: 28.4% gain
Of note: Passat sales exceed 10,000 units for the third month in a row.
Vehicles sold: 22,515
Change from a year earlier: 19.2% gain
Of note: The company's "gateway" entry car, the C-Class, led with sales of 6,649.
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