Analysts Predict US Auto Sales in May Up More Than 6% image

Analysts predict that US auto industry has increased more than 6% in May, offsetting the disappointing result from April.

Auto demand in May has increased as the housing market began to recover, consumer spending rose and customers were forced to buy new vehicles to replacing their aging ones. Analysts expect auto sales in the US to have reached 15.1 million vehicles, an increase from the disappointing 14.9 million vehicles from April. Sales last month were affected by the lower-than-expected results of some automakers and weaker sales to commercial customers.

“I’m less concerned about April being indicative of any sort of downturn,” Gabelli & Co auto analyst Brian Sponheimer said. “There’s still a great deal of pent-up demand that needs to work its way through the system. On the whole, we’re still looking at another two years of outperformance for the auto industry as it relates to the broader economy.”

As the US auto industry is still recovering from the economic downturn which pushed GM and Chrysler to bankruptcy in 2009, the monthly auto sales are an early indicator of the health of the economy.

Source: Reuters