Zoom-Zoom: Analysts Predict 32% Growth In New Car Sales

May 25, 2012

Looking for a bit of good news to send you off on your long, holiday weekend?* According to TrueCar.com, May's new vehicle sales should come in 32% above May 2011.

As exciting as that is, though, we should point out that a few automakers are skewing the curve -- namely, Honda, Toyota, and to a lesser degree, Nissan.

At this time last year, those companies were still reeling from the effects of the Tohoku earthquake and tsunami that hit northern Japan on March 11, killing thousands, destroying communities, and bringing production in many areas of the country to a standstill. Decreased production, coupled with consumer fears, led to dismal sales.

As a result, Honda's May 2012 sales should come in about 61.2% higher than in 2011. Nissan will be up 37%. And Toyota? A whopping 90.8%.

That said, even without those aberrations, the year-over-year improvements are impressive, and all major automakers are expected to see double-digit growth. Chrysler, for example, should ring 32.9% more sales than it did in May 2011, and Volkswagen, 31.6%. Even at the low end of the scale, Ford's 10.5% growth is nothing to sneeze at.

In fact, the only folks down from 2011 are Jaguar (-4.2%), Suzuki (-5.6%), and Mitsubishi (-18.1%). Otherwise, it's black ink as far as the eye can see.

Even better -- and perhaps even more telling -- sales will be up dramatically from last month, too. Nissan is the biggest winner by far, with projected sales of 46.2% over April 2012, but even the automakers at the rear of the April-to-May sales pack have something to cheer about. (By which we mean Volkswagen, up 8.8%, and Chrysler, 8.6%.)

All told, TrueCar expects to see May sales about 18.3% better than they were in April.  

Why the increase?

To some degree, we're still benefiting from America's recovery from the Great Recession. Consumers put off buying new vehicles when times were tough, but as things improve, they're steadily returning to showrooms.

But that's not all. According to  Kristen Andersson, Senior Analyst at TrueCar.com, the sales boom is also due to the attractive vehicles sitting on showroom floors: "Strong products from all automakers are driving sales as automakers continue to maintain or reduce incentive levels." As an example, she cites Volkswagen, which "should have their best sales ever in the month of May with strong sales of the redesigned Passat and Jetta."

Of course, May is typically a strong month for sales, and analysts have been expecting the growth for some time. So ultimately, the 1,400,665 new light-vehicle sales expected in May will leave the seasonally adjusted annualized sales rate flat, at about 14.5 million -- the same figure we saw in April. 

Are you part of the May sales spurt? Or are you holding out for better deals? Drop us a line and let us know, or leave a comment below.

* Well, those of you in the U.S. anyway. And those of you with jobs that give you weekends and holidays off. For the rest of you/us, think of this as a pre-work pick-me-up.

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