General Motors & Ford: Solid Sales Suggest It Really Was the Weather

Shares of General Motors (GM) and Ford Motor (F) driving higher today following the release of robust auto-sales data today.

REUTERS

The Wall Street Journal has the details:

U.S. auto sales surged in May, confirming that the cold winter had more to do with damping demand earlier this year than a dip in consumer confidence.

General Motors Co., the largest U.S. auto seller, said its sales jumped 13% to 284,694, easily topping expectations as the company contends with the fallout from a steady flow of recalls over safety concerns…Toyota Motor Corp. (TM) and Chrysler Group LLC posted 17% unit sales gains, Nissan Motor’s (NSANY) rose 19% and Honda Motor’s (HMC) rose 9%, all compared with a year earlier. Some companies were still counting and a final industry tally for the month is expected later on Tuesday…Ford Motor Co. said sales rose 3% as the company tried to maintain inventory on its F-150 pickup trucks and cut incentives.

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The Lindsey Group’s Peter Boockvar adds the numbers:

Autodata is aggregating all the May auto sales and they calculate a SAAR of 16.77mm, the most since February '07. Expectations were closer to 16mm and this compares to 15.98mm in April. To smooth out the winter and spring bounce, the 6 month average comes to 15.80mm which compares with the full year 2013 average of 15.49mm. Bottom line, helped by job gains of 200k+ for 3 straight months and likely followed by a 4th in May combined with the ease of access to auto credit, particularly for the subprime client as the yield grab for auto backed asset backed securities provide a constant flow of credit, auto dealer show rooms were busy in May.

S&P Capital IQ’s Efraim Levy explains how General Motors posted such strong numbers:

GM May sales were up 13% year to year, as the company demonstrates the ability to shrug off rising recall volume and negative safety headlines. All four brands posted gains. While results were boosted by 21% higher fleet sales, retail sales were up a healthy 10%. Fleet sales benefited from a shift to May from June last year, and we foresee payback with a year-to-year volume decline in June. Average transaction prices were up solidly in our view. Based on early peer reporting, we believe the industry will report healthy gains, including the benefit of a fifth weekend of sales.

Shares of General Motors have gained 1.1% to $35.25 at 2:43 p.m., while Ford Motor has risen 0.8% to $16.57, Toyota Motor has advanced 0.9% to $114.96 and Nissan Motor has ticked up 0.2% to $18.31. Honda Motor has fallen 0.4% to $35.14.