May Car Sales Skyrocket; Toyota Misses the Mark

In spite of last month’s stock market drop and fewer incentive programs, Americans bought up new cars for yet another month of improved sales.

The car industry’s double-digit increase in sales indicates that Americans believe the economy is strong enough for them to purchase a new automobile. Gas prices are remaining consistent, and it’s easier to qualify for auto financing.

May became the seventh consecutive month of higher year-over-year sales for the U.S. auto industry.

Domestics Do Well While Toyota Falters

General Motors, Chrysler, and Ford all experienced double-digit gains compared to May of 2009, when GM and Chrysler were headed for bankruptcy. Ford’s Wednesday sales announcement coincided with the day it reported it would cease production of the Mercury brand by the end of 2010.

Most European and Asian carmakers also enjoyed large gains in May.

The lone exception was Toyota. The Japanese carmaker has depended on prodigious discounts for the last three months to keep sales alive after massive safety recalls. Those incentive programs seemed to lose their appeal in May, as sales rose only seven percent. On the other hand, Lexus, Toyota’s luxury brand, kept pace with competitors’ performance with a 31-percent sales gain.

Toyota claimed that its sales did not spike as drastically in May because competitors had better year-over-year comparisons.

The auto industry as a whole saw a rise of over 19 percent for May compared to last year and 12.3 percent compared to April of this year, according to Autodata.

Brand-by-Brand Sales Figures

Bolstered by healthy demand for the new Mustang and F-Series pickup truck, Ford saw gains of 22 percent. Thanks to large fleet orders and strong performances from the four brands that remain—Cadillac, GMC, Buick, and Chevrolet—GM sales increased by 17 percent.

Chrysler experienced the largest gains of Detroit’s Big Three with a 33-percent gain. May marked the first month in over two years during which Chrysler sold over 100,000 vehicles, boosted by solid sales of its minivans, trucks, and Jeep Wrangler.

Honda saw overall sales rise by 19 percent thanks to 30-percent gains for the Civic, Accord, and Pilot.

Hyundai posted the best May in its history, with a sales increase of 33 percent. The South Korean automaker reported that sales of the all-new Sonata sedan almost doubled. Sales of the new Hyundai Tucson SUV skyrocketed 227 percent.

Nissan sales increased by 25 percent due to clamoring demand for sedans like the Altima, Sentra, and Versa.

The Outback and Forester led Subaru to a 35-percent sales gain, while the Soul, Sorento, and Forte boosted Kia sales by 21 percent.