DETROIT—General Motors' U.S. sales rose 13 percent last month amid an escalating recall crisis as May marked another month of robust consumer demand for the auto industry.
All four of GM's brands increased sales as the auto maker posted its biggest monthly gain of the year. Nissan Motor Corp., Toyota Motor Corp., Mazda Motor Corp., and Chrysler Group tallied their biggest gains of 2014 with double-digit increases in May. Hyundai Motor America advanced 4 percent and Ford Motor Co. was up 3 percent.
GM's increase was double what analysts had projected. After a sluggish start, the auto maker's sales are now up 2.8 percent for the year.
“There's some risk associated with the recalls, but it hasn't been evident in GM's sales numbers so far,” Jeff Schuster, senior vice president of forecasting for researcher LMC Automotive, said before the results were released. “The jury is still out, but at this stage, it's not derailing their momentum.”
Chevrolet led GM with a 14 percent gain, followed by Buick at 11 percent. GMC was up 8 percent, while Cadillac advanced 6 percent.
GM said its retail sales advanced 10 percent while fleet shipments rose 21 percent last month.
Nissan reported a 19 percent rise in May sales—its second straight month of double-digit gains with the Nissan brand setting a May record of 125,558 units sold, up 18 percent, and Infiniti volumes advancing 31 percent to 10,376.
The Altima, Sentra, Rogue, Versa and Juke—all core models—each set May U.S. sales records. Overall, the Nissan brand has set sales records in 14 of the last 15 months.
"Car sales are heating up as we head into summer,” Fred Diaz, Nissan's senior vice president for sales, marketing and operations, said in a statement.
Toyota Motor Corp. sales jumped 17 percent to 243,236 units. Volume rose 12 percent at the Toyota division behind strong Camry, Corolla, Prius demand, and Lexus deliveries advanced 17 percent.
“Industry sales in May soared as consumer confidence improved and demand for new vehicles continued to strengthen,” Bill Fay, Toyota division group vice president and general manager, said in a statement. "May was just one of those months where everything came together with five weekends, an early Memorial Day and an extra selling day."
Ford said its retail sales climbed 6 percent last month. Demand at the Ford division edged up 2 percent and Lincoln volume jumped 21 percent.
Three core models—the Accord, Civic and CR-V—helped Honda Motor Co. to a 9 percent increase in May sales. Deliveries rose 10 percent at the Honda division and 2 percent at Acura. Honda officials, noting the launch of the all-new Fit this month, said the brand remains well-positioned heading into the second half of the year.
"Our dealers are preparing for heavy customer traffic in the coming months,” said Jeff Conrad, Honda division senior vice president and general manager.
At Chrysler, strong Jeep and Ram pickup demand helped propel the company to its 50th consecutive monthly advance.
U.S. sales of the Rogue crossover set a May record with 18,722, an increase of 8 percent, Nissan said today.
Jeep sales, behind the new Cherokee and redesigned Grand Cherokee, surged 58 percent and Ram pickup deliveries climbed 17 percent.
Jeep deliveries have now jumped 30 percent or more for seven straight months. May also marked the first month ever that Jeep's U.S. volume has topped the 70,000 mark, Chrysler said.
Sales rose 18 percent at the Fiat brand and 3 percent at Dodge, while volume slid 22 percent at the Chrysler brand.
Overall, Chrysler Group's light-truck sales rose 38 percent while car deliveries dropped 27 percent.
Chrysler Group's sales were forecast to rise 14 percent, according to a survey of eight analysts by Bloomberg.
“Our dealers reported brisk May sales over five weekends and the Memorial Day holiday,” Reid Bigland, head of U.S. sales operations for Chrysler Group, said in a statement.
Hyundai Motor America set an all-time monthly sales record in May of 70,907 units, up 4 percent over May 2013. It cited gains of 20 percent or more in sales of the Tucson, Santa Fe, Genesis and Equus.
Kia Motors America set a monthly sales record of 60,087 units, a 15 percent increase over May. May also marked the first time Kia has generated more than 60,000 in U.S. sales in a month.
May sales rose 17 percent to 5,840 at Jaguar Land Rover North America. Land Rover sales reached an all-time May high of 4,536 units, up 28 percent, while deliveries slipped 9 percent.
Volkswagen Group said sales at the VW brand slumped 15 percent and the brand's U.S. deliveries have now skidded 14 consecutive months.
Audi reported deliveries of 16,601 vehicles, which is the brand's second-best month ever and its 41st consecutive month of record sales. The U.S. launch last month of the Macan crossover helped Porsche set an all-time monthly sales record of 4,609.
Sales at Mitsubishi Motors Corp., driven by the Outlander Sport and revamped Mirage, rose 54 percent. It was the third consecutive month the company's deliveries surged by 47 percent or more.
"We are enthused that new-car shoppers are taking notice of our brand, and we are not going to let up in June," said Don Swearingen, executive vice president for Mitsubishi Motors North America.
U.S. light-vehicle sales for the month were projected to rise 6.5 percent to 1.54 million, based on a survey of analysts by Bloomberg. But that estimate proved too conservative based on results reported so far today.
The annualized pace of sales—forecast to come in at 16.1 million, according to analysts' estimates—also appeared too low. Still, it would mark the third consecutive month the sales pace has topped 16 million units after a weaker-than-expected start to the year.
Chrysler today projected the SAAR will come in at 16.9 million, including medium and heavy-duty trucks, for May. GM pegged the SAAR for May at 16.5 million units and Ford officials said the May SAAR could come in as high as 17 million units, including medium and heavy-duty trucks.
The SAAR totaled 15.5 million in May 2013.
5 weekends of sales
May deliveries were aided by five weekends of sales and generous Memorial Day deals that were extended through Monday, June 2, the cutoff point for last month's sales count.
TrueCar estimated the average incentive per new unit sold last month rose 1 percent to $2,677 from May 2013, and jumped 3.5 percent from April. Hyundai-Kia, Honda and Volkswagen Group posted the biggest gains in deals over May 2013, while incentives dropped at Chrysler and Nissan, TrueCar said.
Mazda was another auto maker that reaped dividends from strong holiday shopping that drove sales up 23 percent to 29,731 vehicles.
"Despite the economy being anyone's guess these days, with GDP down and durable goods orders off, we see consumer confidence looking strong and shoppers turning into buyers, and the proof of this is the results we saw across the industry with May sales," said Ron Stettner, vice president of sales for Mazda North America. "Memorial Day was huge for us, and we feared a slowdown toward the end of the month that never happened."
Michael Foote, a general manager at Lia Auto Group in Albany, N.Y., said sales and traffic were “very heavy” last month.
The group sells Toyota, Scion, Kia, Honda, Volkswagen, Hyundai, Infiniti, Nissan, Chrysler, Jeep, Dodge, and Ram.
“We use database mining through a software program to contact customers to put them into a new or newer car for close to the same monthly payment. It's worked well for us, has helped our sales immensely,” Foote said. “Honda had a fantastic program on their core products (the Accord, CRV and Civic), strong lease programs and finance programs.
"Business is fabulous," Foote added. "We had a long winter, so it's well deserved.”
GM, Ford forecasts
Sales at GM were forecast to rise 6.4 percent, according to analysts surveyed by Bloomberg, despite a raft of recalls this year, including 2.59 million small cars for a faulty ignition switch linked to 13 deaths.
Analysts said U. S. buyers see the spate of flaws as a legacy of the company's past rather than a defining condition of GM today.
"Shopper consideration for every GM brand has remained consistent through the recall headlines," Edmunds.com Senior Analyst Jessica Caldwell said. "Many people may not realize that GM is the parent company of these brands, but others may be overlooking the trouble with older models and simply seeking shiny new sheetmetal that serves their needs."
Ford, facing a comparison to a strong May last year, was forecast to post a sales decline of 0.2 percent, according to the average of 10 analysts estimates gathered by Bloomberg.
U.S. auto sales topped 16 million a year from 1999 to 2007—peaking at 17.4 million in 2000—and remain on track to reach that level again in 2014, analysts say.
At Machens Chrysler Doge Jeep Ram in Columbia, Mo., Sales Manager Mark Winstead said the dealership spent a lot of money on advertising in May and was counting on robust sales to offset that spending.
Clamor for SUVs
“Jeep is always a hot product, people want SUVs,” Winstead said last week ahead of the sales report, adding Ram pickups with a diesel engine were also popular sellers last month.
Mike Shaw, dealer principal at Mike Shaw Automotive in Denver, described May as “great” and credited favorable economic indicators and aging cars and trucks that are forcing some consumers back into a new-car showroom.
“People still need a car,” Shaw said. “The economy's better.”
Shaw Automotive sells Buick, GMC, Honda, Kia, Scion, Subaru and Toyota but not all brands fared equally well last month, he said.
“Incentives are pretty aggressive right now, specifically the GM incentives,” Shaw said. “They were doing OK until we had a stop sale on the most critical merchandise. We had momentum then lost it all.”