Hopes that strong US car sales will point towards recovery

 
City A.M. Reporter
THE AMERICAN auto industry is expected to report sales growth of more than six per cent in May, shaking off disappointing results in the previous month as consumers still headed to dealer lots to buy new cars and trucks.

Rising consumer spending and a recovering housing market have buoyed demand for autos even as aging cars and trucks have forced many Americans into the market for replacement vehicles, analysts and industry executives said.

Analysts polled by Thomson Reuters expect an annual sales rate in May of 15.1m vehicles.

Automakers are scheduled to report May sales on Monday.

A positive result for May would be a welcome rebound from April when the rate disappointed, coming in at 14.9m vehicles due to lackluster results from some foreign automakers and weaker sales to commercial customers.

The annual sales rate had topped 15m each month since November before falling short in April.

“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.”