DETROIT Automakers on Tuesday reported higher-than-expected U.S. new car sales of 1.6 million in May, with rising consumer demand underpinning a broader recovery in the U.S. economy.
The auto industry in May recorded its strongest annual sales rate since before the 2008 recession, as transaction prices remained strong and discounts did not increase.
Industry sales rose 11.3 percent to 1,606,264 vehicles, according to a compilation of manufacturers' results by Reuters.
The top seven automakers beat analysts' expectations, some by a wide margin. General Motors Co (GM.N) and Chrysler Group FIA.MI said May sales were the best for that month in seven years. Nissan Motor Co (7201.T) set a sales record for May and Hyundai Motor Co (005380.KS) had its best month ever. Ford Motor Co (F.N) and Toyota Motor Corp (7203.T) also topped forecasts.
The annual sales rate in May hit 16.77 million vehicles, the strongest pace since it reached the same level in February 2007, according to research firm Autodata. Economists polled by Reuters had expected a rate of 16.1 million.
"Industry sales in May soared as consumer confidence improved and demand for new vehicles continued to strengthen," said Bill Fay, group vice president of Toyota Motor Sales USA.
A record number of recalls at GM since the first of the year did not crimp demand for the automaker's new vehicles.
GM's May sales were up 12.6 percent to 284,694 vehicles, well above the consensus of nine analysts polled by Reuters. All four GM brands reported sales increases, with gains at Chevrolet and GMC driven in part by strong demand for new full-size utility vehicles and pickups.
Ford said May sales rose 3.0 percent to 254,084 vehicles. Chrysler was up 16.7 percent to 194,421. Toyota climbed 17.0 percent, to 243,236; Honda, up 9.0 percent to 152,603; Nissan up 18.8 percent to 135,934, and Hyundai-Kia up 8.5 percent to 130,994.
The U.S. auto industry experienced a third straight month of strong sales after cold and snowy weather pressured results in January and February. Analysts polled by Reuters had expected May industry sales to rise about 7 percent.
Monthly auto sales are an early snapshot of consumer demand for big-ticket items. U.S. new-car sales in April rose 8 percent and the annual selling rate finished at 16.04 million vehicles.
Specific indicators in May were mixed. Sales of full-size pickup trucks rose 17.2 percent at Chrysler and 9.5 percent at GM. At Ford, sales of the best-selling F-series pickup fell 4.3 percent, with the automaker trimming discounts on 2014 models as it readies the launch this summer of a redesigned, aluminum-intensive 2015 F-series.
Average transaction price for a new vehicle in May was $32,307, according to research firm Kelley Blue Book, which said average new-car prices were up $653 from a year ago, but down slightly from April.
(Editing by Jeffrey Benkoe and Matthew Lewis)