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2 Experts Weigh In On May's Auto Sales

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Automakers released its U.S. sales reports for the month of May on Tuesday. Kelley Blue Book senior analyst Alec Gutierrez and Autotrader senior analyst Michelle Krebs discussed the figures in a joint conference call on Tuesday.

Gutierrez estimated a seasonally adjusted annualized rate of $17.4-$17.5 billion in sales, which would mark the best May since 2006. He said that industry growth continues to be supported by favorable financing options: low interest rates and long-term loans.

Gutierrez also noted that May posted yet another record number in sales of certified pre-owned vehicles.

He and Krebs also highlighted a shift in consumer preference toward trucks and sport utility vehicles. General Motors Company (NYSE: GM), Gutierrez said, saw a 34 percent increase in the sales of its truck portfolio, while Ford Motor Company (NYSE: F) saw similar growth in sales for its Edge crossover. He believes that these large, high-cost models are driving up average transaction prices, which are up 4 percent year-over-year.

Related Link: What's Driving The Growth In Auto Sales? AutoNation Answers

Krebs noted that while car sales are slumping overall, there is one major exception: performance vehicles and sports cars had an exceptional May. She said Ford's Mustang enjoyed its best month since 2007, and Dodge's Hellcat also performed well. Krebs thinks that a healthy stock market, higher real estate prices, and cheap gas are encouraging buyers to spend a little extra on more expensive vehicles.

When asked why the auto market seems to be rebounding more strongly than the housing market, Krebs offered an interesting insight. According to her, millennials, who constitute an increasing share of demand in each industry, are renting homes but buying cars.

Here is a summary of the U.S. sales figures:

  • Ford: 250,813 vehicles, down 1 percent
  • GM: 293,097, up 3 percent
  • Fiat Chrysler Automobiles NV (NYSE: FCAU): 202,227, up 4 percent
  • Toyota Motor Corp (ADR) (NYSE: TM): 242,579, up 3.6 percent
  • Nissan (OTC: NSANY): 134,799, down 0.8 percent
  • Volkswagen (OTC: VLKAY): 34,758, up 8 percent

Latest Ratings for F

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Jul 2020Credit SuisseMaintainsNeutral
Jul 2020BarclaysMaintainsEqual-Weight

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