U.S. May auto sales race to strongest pace in nearly a decade

DETROIT (Reuters) - The U.S. auto industry remained on track for the best sales year in almost a decade as consumers bought cars and trucks at the fastest monthly pace since early 2006.

Sales of pickup trucks and SUVs in May again led the way, which bodes well for profit margins of the major automakers. Consumers are shying away from cars and snapping up trucks and sport utility vehicles as the national average price of gasoline, at $2.75 a gallon, is nearly a dollar less than at this time last year.

As has been the case since the 2008-2009 recession, the auto industry's recovery continues to outpace that of the overall economy, which is on course to grow 0.8 percent in the second quarter, according to Federal Reserve forecasts.

Consumers are finding it easier to obtain auto loans - another factor in boosting sales, analysts have said. Experian reported the average length of U.S. loans for new and used vehicles in the first quarter hit record highs, and nearly 30 percent of new-vehicle loans have payback periods longer than six years.

General Motors Co forecast industry U.S. sales to finish May at a seasonally adjusted annualized rate of 17.6 million vehicles, the strongest pace since January 2006. Industry sales are expected to top 17 million vehicles this year, besting the 16.94 million reported in 2005.

GM sales rose 3 percent in May, while Fiat Chrysler Automobiles' increased 4 percent, the automakers said on Tuesday.

Ford Motor Co sales fell 1 percent as its F-Series pickup trucks declined 10 percent. Its primary model, the F-150 pickup truck, remained in high demand and the company said it is reducing downtime at two plants this summer as it ramps up production of a new aluminum version. Ford said that its F-150 sales will rise as production ramps up at its Kansas City, Missouri, plant.

For the second year in a row, May auto sales were boosted as more consumers returned to showrooms after a harsh winter, a GM spokesman said. Auto sales are viewed each month as an early snapshot of U.S. consumer spending.

GM sales reached 293,097 vehicles as all pickups and its Chevrolet Equinox crossover rose 30 percent. GM said its average sale prices in May rose $550 to about $34,000 per vehicle.

Fiat Chrysler's U.S. sales hit 202,227 vehicles in May - the first time above 200,000 in any month since March 2007/

May sales for Toyota Motor Corp <7203.T> and Nissan Motor Co <7201.T> both slipped less than 1 percent. Honda Motor Co <7267.T> sales rose 10.6 percent.

There was one fewer selling day in May compared with a year ago.

Automakers are still benefiting as consumers who put off buying new vehicles from 2008 to 2013 return to showrooms, said Dave Fish of MaritzCX, a market research firm. Maritz estimated that if automakers sell 17.1 million cars and light trucks this year in the United States, another 13 million older vehicles will still need to be replaced.

?It looks like the good times may roll for some time into the future,? Fish wrote in a report.

(Additional reporting by Joseph White; Editing by Jeffrey Benkoe and Matthew Lewis)

WhatsAppFacebookTwitterLinkedinBeloudBluesky