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Fuel-efficient cars are selling particularly well in March as gas hit an average price of $3.80 per gallon nationally, forecasters said. REUTERS

U.S. car sales in May extended their year-long gains as demand for fuel-efficient cars remained strong, despite a slight gasoline price decline, and analysts affirmed expectations for this year's U.S. car sales to reach 14.2 million.

Sales, which were reported Friday, grew across the board in May for U.S. automakers with Chrysler Group LLC, a subsidiary of Italian Fiat S.p.A. (Milan: F), leading the way in growth and General Motors Company (NYSE: GM) leading in volume, while Ford's car and truck sales remained strong on demand for fuel-efficient vehicles. The Asian carmakers also report U.S. sales on Friday with Toyota Motor Corporation (NYSE: TM) enjoying bumper growth of 73 percent while Nissan Motor Company Ltd. (Tokyo: 7201) gained almost 21 percent. Honda Motor Company Ltd. (NYSE: HMC) also saw robust sales growth of 46 percent, but Mazda Motor Corporation (Tokyo: 7261) remained sickly gaining just 5.4 percent on an adjusted basis.

May sales came in slightly lower on somewhat weaker-than-expected growth from Toyota, but overall the U.S. automotive industry remained healthy and sales are expected to continue to be robust for 2012, though they might soften somewhat as the summer progresses. The seasonally adjusted adjusted annual rate (SAAR) may be adjusted down below 14 million later in the year, but the expectation for the entire year remains 14.2 million vehicles.

We think sales came in a little bit below expectations, but ultimately they were still strong, Alex Gutierrez, senior market analyst for automotive insights at Kelley Blue Book (KBB) said Friday.

KBB had predicted the SAAR for May to be 14.2 million, but revised it down to 14 million. However, a rate for the year of 14.2 million is still considered reasonable. Moreover, GM actually upgraded its SAAR prediction to between 14 million and 14.5 million, surpassing KBB's estimate.

Analysts for Reuters were less optimistic with a revised SAAR of 13.78 million for May.

From an annualized basis it (softness in May sales) works out to 25,000 to 35,000 vehicles a month, which is not a huge decline considering you're selling more than 1 million vehicles a month, Gutierrez said.

Slight softness in May numbers was the result of narrower incentive programs than in previous years, but this was largely offset by the high availability of good credit for car buyers. Car loan portfolios are considered to be more stable now as the value of used cars has risen 15 to 20 percent since 2009, making them less risky, Gutierrez said, adding that the industry overall still looks pretty healthy.

Car sales have been a bright spot in a generally sluggish U.S. economic recovery, Gutierrez reported earlier in May. Car sales made up half of the 2.2 percent increase in first quarter GDP growth, emphasizing that U.S. economic growth has been driven primarily by gains in the automotive industry. Normally, increased car sales follow improvements in the economy and GDP growth, rather than causing it.

At this point, it is almost as if the tail is wagging the dog. During a typical post-recession recovery, we would expect to see auto sector gains being driven by broad economic growth. In the first quarter, the opposite was true, as auto sales were the primary driver behind GDP growth, Gutierrez said.

Weak unemployment numbers in May are not expected to have a significant impact on car sales moving forward, although continued declines in consumer confidence may bode poorly.

U.S. Car Companies Reporting Sales: GM, Chrysler, Ford

Demand for Jeep brand cars and flagship Chrysler 200 and 300 sedans drove strong sales in May for Chrysler which saw a sales gain of 30 percent. General Motors Company (NYSE: GM) saw more modest growth of just under 11 percent but predicted a return to prerecession sales levels in the 2012 to 2013 model years. Ford Motor Company (NYSE: F) sales grew 12.6 percent in May on steady demand for fuel-efficient cars and trucks.

Chrysler Group

Chrysler Group said Friday that it sold 150,041 vehicles in May and projects a seasonally adjusted annual selling rate (SAAR) of 14.2 million, making it the best showing for the month in five years and the 26th consecutive month of year-over-year sales gains for the renewed Detroit automaker.

Chrysler Group's sales for the year are up 33 percent over the year before -- 64 percent in the car category and 22 percent in the truck category.

Chrysler brand sales rose 81 percent for the best May sales in four years with the Chrysler 200 sedan gaining 87 percent and the Chrysler 300 posting triple-digit gains. Fiat brand sales jumped 128 percent in May on the strength of Fiat 500 sales. Dealer orders of the sport Fiat 500 Abarth exceeded the production run for the 2012 model year. May was only the first full month of Abarth sales.

Jeep, Dodge and Ram Truck brand sales also climbed but more modestly. Jeep sales rose 24 percent, marking the brand's best May sales in 12 years as the Jeep Wrangler model gained 44 percent. Dodge sales increased 14 percent, the best May in four years for the brand as both the Avenger and Challenger models posted strong numbers. Ram sales increased 29 percent solely on the strength of the brand's pickup trucks.

By volume, Dodge brand cars and SUVs were the best selling vehicles for Chrysler Group, followed by Jeep, Chrysler Brand, Ram Trucks and Fiat.

Fiat S.p.A. (Milan: F) shares fell 2.47 percent to €3.71 ($4.57) Friday.

General Motors

General Motors Company (NYSE: GM) experienced modest U.S. sales gains of 10.9 percent in May with sales of 245,256 vehicles, the highest monthly volume for the company since August 2009.

GM's sales in May were the highest in almost three years, GM vice president of U.S. sales and operations Don Johnson said.

Detroit-based GM's May sales growth was less robust than rival Chrysler, which gained 30 percent in sales, although GM's volume still far surpassed its smaller competitor. GM's small and compact cars outperformed the company as a whole with May sales gaining 16 percent on demand for the new Chevrolet Sonic and Buick Verano.

Pickup sales were, as usual, big gainers for GM. Full-size pickup sales rose 23 percent, mid-size were up 34 percent, and SUVs were up 14 percent.

GM is currently estimating a seasonally adjusted annual rate of 14 million to 14.5 million, putting its estimate ahead of Chrysler's. GM says it expects to approach prerecession sales levels during the 2012 and 2013 model years.

About 70 percent of our nameplates will be new or freshened over the course of 2012 and 2013 and that positions us very well as the industry and GM start to approach pre-recession sales levels, Johnson said.

General Motors Company (NYSE: GM) shares fell 3.02 percent to $21.53 Friday.

Ford Motor Company

Continued strong car sales were joined by a surge in truck and SUV demand to drive a 12.6 percent growth in May U.S. sales for Ford Motor Company (NYSE: F), which cited demand for fuel efficient vehicles as a primary driver of growth.

Car sales rose 6 percent for the Dearborn, Mich.-based automaker, while SUV sales grew 12 percent and truck sales soared 21 percent. Ford sold a total of 216,267 vehicles in May. Cars made up the biggest segment of Ford's sales, 36 percent, while trucks made up slightly less at 34 percent. The remainder of Ford's sales were SUVs.

Fuel efficiency continues to be a top purchaser driver, Ford vice president of U.S. marketing, sales and service Ken Czubay said.

Ford's bestselling vehicle in May was the F-series truck which sold 54,836 units, a 29 percent increase over the year before. Likewise, sales of the Ford Fusion were stellar in May, up 9 percent for the model's best ever month. The Focus gained 11 percent, while the Taurus gained 9 percent. A breakaway favorite was the Mustang which improved sales 58 percent. Ford Fiesta sales dropped 14.6 percent, but the company has previously said this is the result of balancing sales with the redesigned Focus.

Ford also announced it plans to increase third quarter production by 5 percent from 2011 but will keep second quarter production unchanged from previous guidance.

Ford Motor Company (NYSE: F) shares fells 3.5 percent to $10.19 midday Friday.

Japanese Car Companies Reporting Sales: Toyota, Nissan, Mazda, Honda

Toyota Motor Corporation (NYSE: TM) likewise saw bumper sales in May, which the company said rose 72.9 percent in a preview announcement Friday morning.


Toyota sold 202,973 cars in May, a 72.9 percent increase on a selling day adjusted basis and an 87.3 percent gain on a raw volume basis. Toyota City-based Toyota's sales likely look particularly strong in light of the difficulties the company faced last year as a result of the Japanese tsunami and floods in Thailand which disrupted production and supply chains for Japan's largest automaker.

Toyota Motor Corporation (NYSE: TM) shares fell 2.07 percent to $75.30 Friday morning.


May U.S. car sales grew 20.5 percent for Nissan Motor Company Ltd. (Tokyo: 7201) on strong demand for the Altima as the company continues to push out remaining inventory in advance of the launch of the 2013 model in June, demand remained high for fuel-efficient models and moderating gas prices drew some consumers back to trucks.

Fuel efficient models ... had a great May, but moderating gas prices drove gains across our entire truck lineup, Al Castignetti, vice president and general manager of Nissan USA's Nissan division, Demand for the Altima remains strong through our sell-down efforts.

Nissian brand sales grew 16.4 percent to 81,202 vehicles, while sales of Infiniti-brand luxury cars skyrocketed 65.8 percent to 10,592 units.

The Nissan brand's bestselling vehicle by far was the Altima which it has been pushing heavily as it prepares to release the newly updated 2013 model. The Altima made up almost half of the company's 49,068 car sales. The bestselling truck was its crossover Rogue model which accounted for over a third of its 32,134 total truck sales.

The Infinti brand's strong May sales growth was driven by demand for its G series cars and new JX model. The G series vehicles made up roughly half of the brand's 10,592 vehicles sold, while the JX accounted for about a third.

Nissan Motor Company Ltd. (Tokyo: 7201) shares fell 3.03 percent to 735 yen Friday.


Mazda Motor Corporation (Tokyo: 7261) struggled in May posting U.S. sales growth of just 5.4 percent on a daily selling rate adjusted basis, however, the company's sales for the year to date remain strong compared to last year, up an adjusted 19.3 percent.

Hiroshima-based Mazda sold 20,357 cars in May, a 5.4 percent adjusted gain. On a volume only basis, Mazda's May U.S. sales grew 13.9 percent. Mazda's fuel-efficient Skyactiv technology accounted for 72 percent of May sales.

Mazda's modest gains were driven by the new CX-5 which was its second bestselling vehicle after the Mazda3. Mazda3 sales, however, dropped 3.6 percent. The only other Mazda model to increase sales in May was the Mazda6, which experienced respectable 40 percent sales growth.

Mazda's global competitiveness has been hurt particularly badly by the rising value of the Japanese yen, a lack of international production, and supply-chain disruptions caused by last year's Japanese tsunami and floods in Thailand.

Mazda Motor Corporation (Tokyo: 7261) shares were down 4 percent to 96 yen ($1.22).


U.S. car sales were up 47.6 percent for Honda Motor Company Ltd. (NYSE: HMC) in May as the Japanese carmaker consummated its recovery from last year's tsunami with strong sales of its flagship Civic and Accord cars.

Tokyo-based Honda sold 133,997 vehicles in May, a 47.6 increase over the year before (36.3 percent on a selling-day adjusted basis). The Honda brand sold 119.411 cars, up 46 percent, while the Acura brand sold 14,586, up 62.1 percent.

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, American Honda executive vice president of sales John Mendel said.

The Honda Civic and Accord models led the brand with sales increasing 80 percent and 70 percent respectively. The perennially popular Honda CR-V also increased sales by about 25 percent.

For the Acura brand, the RDX experienced explosive growth of 216.8 percent for its best month ever with 3,301 units sold. Sales of Acura crossover SUVs rose 64.7 percent.

Honda Motor Company Ltd. (NYSE: HMC) shares fell $1.07 to $30.72 Friday.

European Car Companies Reporting Sales: Volkswagen

Volkswagen AG (London: VOW) U.S. sales grew 28.4 percent in May, the company's best May since its heyday as a 70s era-icon.

Wolfsburg, Germany-based VW sold 38,657 cars in the U.S. during May, over a quarter of which were of its award-winning Passat model. May was the best month ever for Passat sales. The VW volume leader remained the Jetta which sold over 15,000 units. The Beetle, boosted by a fresh redesign, had its best May since 2002.

VW's U.S. May sales were referred to as a significant accomplishment by the company's U.S. president and CEO, Jonathan Browning.

Volkswagen AG (London: VOW) shares fell 3.41 percent to €117.55 ($145.32) Friday.

Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM), Toyota Motor Corporation (NYSE: TM), Honda Motor Company Ltd. (NYSE: HMC), Nissan Motor Company Ltd. (Tokyo: 7201), Hyundai Motor Company Ltd. (PINK: HYMLF) and Mazda Motor Corporation (Tokyo: 7261) also report their sales on Friday. May U.S. auto sales numbers and industry analysis will be added here as the companies release their numbers.