May Auto Sales On The Upswing, Led By Chrysler – Forbes

Posted: Sunday, June 01, 2014

May auto sales look like they will beat a Seasonally Adjusted Annual Rate of 16 million for the third month in a row.

That’s an important sign U.S. auto sales could finally regain pre-recession volumes after five years of healthy, but generally slow and steady growth. U.S. auto sales haven’t beat 16 million since 2007, when sales were 16.2 million.

Sales volume in 2014 might look similar to 2007, but profitability is the crucial difference compared with 2007. In that year, Chrysler, Ford and General Motors among them had more than $46 billion in losses despite the relatively high sales volume.

In 2014, Ford and GM have already booked a combined profit of more than $1.2 billion for the first quarter. The Chrysler Group (Chrysler, Dodge, Jeep, Ram, Fiat, Alfa Romeo) also said it expects to finish 2014 in the black despite a first-quarter net loss of $690 million due to “infrequent items.” Without those special items Chrysler said it would have made adjusted net income of $486 million.

TrueCar, based in Santa Monica, Calif., said that based on online shopping, it expects the Chrysler Group to post the biggest percent increase in U.S. auto sales for the month of May of the top eight volume manufacturers.

2014 Jeep Grand Cherokee Summit

2014 Jeep Grand Cherokee Summit (Photo credit: AlBargan)

TrueCar last week predicted May sales of about 189,000 for the Chrysler Group, an increase of 13.4 percent from a year ago., also in Santa Monica, had a similar forecast for Chrysler.

All the automakers are expected to announce May auto sales on Tuesday, June 3. Several forecasters said they expect May auto sales to top 1.5 million units.

That works out to a SAAR of about 16.1 million, according to LMC Automotive and J.D. Power and Associates. The SAAR is an estimate of what auto sales would be for a full year, based on sales for one month and adjusting for considerable seasonal variation in auto sales.


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