Chrysler, Nissan to Lead U.S. Car Sales Surge

According to Kelly Blue Book:

Nissan is anticipating another prosperous month with a 13.6 percent year-over-year gain. Both Nissan’s Rogue and Juke are benefitting from increasing popularity in small crossover vehicles, with their combined sales up 47 percent this year. In terms of volume, Chrysler will pick up the most units compared to last year with 12.8 percent growth. Chrysler is having a great year in 2014, gaining a full point of market share versus last year. The Jeep brand in particular has experienced double-digit growth across its full lineup.

Chrysler’s May total of 188,000 will push it ahead of Honda Motor Co. Ltd. (NYSE: HMC), which should sell 143,000 vehicles. Nissan’s total will reach 130,000.

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With the exception of General Motors Co. (NYSE: GM), which will have May sales growth barely ahead of the industry average, the market leaders are in trouble. (Apparently recall problems have not hurt the number one car company much.) Ford Motor Co.’s (NYSE: F) sales will rise only 0.4% to 247,000. Although Toyota Motor Corp.’s (NYSE: TM) sales will be up a modest 5.8% to 220,000. The Japanese company is gaining on Ford for second place in the American market.

The auto industry continues a period of extraordinary growth, despite large gains in 2012 and 2013. The sales pace in May translated to an annual pace of 16.05 million, nearly as strong as in the years prior to the recession. American vehicle sales reached 16.9 million in 2005 and 16.5 million in 2006. During each of these years, the economy was booming. One reason for recent strength in sales likely is that people held on to their old cars through the recession as consumer purchasing power plunged.

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As has been the case in the recent past, mid-sized and compact cars will drive the market, with sales of 237,000 and 229,000 respectively.

Finally, near-record sales should benefit car companies at the bottom line. Most of them cut costs so sharply during the downturn that their breakeven points have dropped considerably.