US May auto sales rise 20% on sweeter incentives

With Toyota and Honda leading the way, US car sales rose by more than 20 percent in May from a year ago, juiced up by increased incentives amid a slow US economy, industry figures showed Friday.

In total, 1.33 million new cars and trucks were sold in the United States last month, according to market researcher Autodata.

But that was fewer than the 1.39 million vehicles forecast by specialist website Edmunds.com, which said that automakers increased their incentives in May, spending $2,135 per vehicle to close a deal.

"Even if sales are lower this month than so far this year, the overall pace is still the highest of the recovery to date," said Edmunds.com chief economist Lacey Plache said.

The Japanese recovery after the March 2011 earthquake-tsunami disaster that forced plant shutdowns and disrupted supply chains for months gained momentum in May.

Toyota sales in the United States soared 87 percent and Honda's sales jumped 46 percent from May 2011 levels.

Bob Carter, Toyota Motor Sales vice president, said the higher sales indicated Toyota not only had recovered from the shortages created by the tsunami but its new products were winning over customers.

Toyota said it was helped by several other factors among them rising consumer confidence, better credit availability, and a steady flow of traffic through its showrooms.

John Mendel, American Honda executive vice president of sales, echoed the sentiment.

"With our best May sales performance since before the financial crisis it's obvious Honda's return to strength is in full swing, and our May sales are impressive irrespective of last year's production supply problems," Mendel said.

Fiat-controlled Chrysler and Germany's Volkswagen posted increases of almost 30 percent from a year ago.

General Motors and Ford, the number one and two US automakers, respectively, and Nissan also reported double-digit increases.

Companies such as BMW, Nissan, Mercede-Benz, Subaru, Volkswagen and Fiat-controlled Chrysler also fared well in May.

"In spite of a tremendous amount of global economic uncertainty, the US new vehicle sales industry continues to power ahead," said Reid Bigland, Chrysler's US sales chief.

"Our May sales increased 30 percent and represented our 26th consecutive month of year-over-year sales growth. We are also in the process of adding production capacity as quickly as possible to meet strong demand for our products," he said.

GM, the leading US automaker, said sales increased 11 percent from May 2011, hitting 245,256 units, the highest monthly total since August 2009 when sales benefited from the government's "Cash for Clunkers" program.

GM brands Buick and GMC both had sales increases of 19 percent and Chevrolet was up 10 percent.

"GM's sales in May were the highest in almost three years and we are poised to keep delivering good news for the US economy with one of the most aggressive new product offenses in our history," said GM's US sales head Don Johnson.

Every GM brand but Cadillac, where the launch of two new models is pending as it sells down older ones, posted a year-over-year increase, action not seen in recent months, noted Edmunds.com senior analyst Michelle Krebs.

Toyota, which recovered its position as global number one recently after two dark years, sold 202,973 units, up 87.3 percent from a year earlier.

Ford sold 216,267 vehicles in May, a 13 percent increase.

"Fuel efficiency continues to be a top purchaser driver, and Ford's wide range of fuel-efficient products delivered again," said Ken Czubay, Ford's vice president of US Marketing, Sales and Service.

Nissan North America sold 91,794 units, up 20.5 percent from 2011. Infiniti sales jumped 65.8 percent, with 10,592 units sold.

The strong May performance had analysts expecting 2012 total US vehicle sales to hit 14.5 million, up from 12.8 million last year.

"Sales are continuing to rebound and consumers are feeling more comfortable buying highly contented vehicles," said Jesse Toprak, vice president of Industry Trends and Insights for TrueCar.com.

"Consumers are not just buying cars, but they're paying fuller prices."

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