Consumers are eating up new automotive deals, reports The Detroit News. Experts predict that May automotive sales may spike by as much as 30 percent. Lower gas prices are expected to bring even more truck buyers into auto showrooms, analysts indicate.
Up 32 percent from 2011
TrueCar.com analysts predict that auto sales in May 2012 will be 32 percent higher than a year ago, as well as 18.3 percent higher than April 2012 totals. Average incentive spending per unit numbers are also expected to rise by $2,392 for May. That would be a 4 percent increase over incentive spending numbers from the previous year.
“Pent-up demand continues to fuel auto sales at a steady and sustainable level in May,” said Jesse Toprak, vice president of market intelligence for TrueCar.com. “All major manufacturers will see double-digit growth this month.”
A bright spot for US economy
According to Barclays Capital, May auto sales will hit at least 14.4 million units, a 30 percent increase over numbers from the previous May. This should more than keep the U.S. auto industry on a pace to hit over 14.5 million sales for the year, a standard of success set previously by analysts.
Even Japanese automakers that were stymied by the 2011 natural disasters in Japan are predicted to experience increased auto sales in May. Both Toyota and Honda should claim added market share, notes The Detroit News.
“We expect sales to be supported by the improving economy… an improving financing environment and the high pent-up trade-in demand from former new car buyers of 2004-08 who still own their vehicles,” said Barclays auto analyst Brian Johnson.
The best year for auto sales since 2007
Half of the U.S. economy’s 2.2 percent first-quarter growth in gross domestic product was a result of increased auto sales, notes Bloomberg Businessweek. Over that span, automotive sales were up 10.3 percent from the previous quarter, putting the industry on pace for its best sales year since 2007.
In the first four months of the year, auto sales are up 10.3 percent and on pace for the best year since 2007.
“This is the largest year-over-year gain since February 2011, when sales increased 27 percent, compared with February 2010,” said John Humphrey, Barclays’ senior vice president of global auto operations.
Gas prices drive truck sales
After peaking nationally at an average of $3.90 per gallon in early April, gasoline prices have fallen 7 percent. At the same time, light truck purchase numbers have increased significantly, says Barclays.
“We believe the bias against trucks will continue to reverse in May,” a Barclays representative noted.
But the light trucks segment — SUVs, minivans and pickups — will still be below the average in 2010-11, when it was 51 percent of the passenger market.