US auto sales rise 18% in May as demand strengthens

02 June 2010 22:29  [Source: ICIS news]

HOUSTON (ICIS news)--US auto sales climbed 18% year over year in May according to data released Wednesday, indicating increased demand and a possible boon for the petrochemical industry.

“Through the financial crisis and bankruptcy process, the auto companies have prepared themselves to be profitable at lower volumes, and we are seeing this in quarterly reports,” said Bruce Belzowski, assistant research scientist and automotive analyst at the University of Michigan.

“If and when consumers begin to purchase vehicles at a higher rate than they are currently, the companies potentially may be even more successful.”

With $2,700 (€2,214) worth of chemical products or chemical processing value used in every US-made vehicle, according to American Chemistry Council (ACC) estimates, increased auto sales translate into eventual chemical demand.

May sales for the six largest US car sellers totalled 883,127 units, compared with 745,255 units in May 2009. Retail auto sales were strong in the first half of the month but fell off in the last two weeks, according to JD Power and Associates.

Chrysler and GM led the year-over-year progress with gains of over 30 percentage points, showing little effects from 2009 bankruptcy stints.

“New vehicles are showing modest improvements with the Detroit three (Chrysler, GM and Ford) and Hyundai spending less on rebates, discounted loans and cut-rate financing,” Belzowski said.

Data showed that consumers in particular returned to the market for trucks, SUVs and suburbans. This suggested that fears of high-priced retail gasoline had subsided.

“Higher fuel prices will definitely move people to more fuel-efficient vehicles, as will possible government incentives, but this will be a slow evolutionary process,” Belowski said.

All-new Super Duty sales for Ford surged 82% in May from last year, while its F-series was up 49%. Honda truck sales were up 18% compared with May 2009, nearly on par with its 19% rise in car sales.

Likewise, sales increased for Chrysler Ram trucks by over 11%. Dodge Dakota sales climbed by 87%.

Overall, May was the best sales month for the industry in 2010 and the fifth consecutive month of gains.

Toyota showed the smallest year-over-year growth, but the company said it expected to gain sales momentum from the Memorial Day weekend in late May. The company said the long holiday weekend was its best selling weekend of the year.

The table below reflects May sales.

	2010	2009
	Total	Total	% change
Chrysler	104,819	78,811	33
Ford	192,253	156,303	23
GM	222,305	168,412	32
Honda	117,173	98,464	19
Nissan	83,764	67,552	24
Toyota	162,813	152,589	7
Total	883,127	745,255	18

($1 = €0.82)

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By: Sheena Martin
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