Ram, large SUVs boost Chrysler's May sales 11 percent

Rising demand for Ram pickups, large SUVs and cars helped Chrysler Group's sales increase 11 percent in May.

The company's car sales rose 16 percent while light truck deliveries advanced 9 percent, Chrysler said Monday.

It marked the 38th consecutive month that the automaker's U.S. sales have advanced.

"We continue to see strong retail sales throughout our product lineup," Reid Bigland, head of U.S. sales for Chrysler Group, said in a statement.

Sales rose 24 percent at the Ram brand, 23 percent at Dodge, 1 percent at Jeep and Fiat, while volume at the Chrysler brand slipped 2 percent.

Ram pickup deliveries rose 22 percent to 31,672. SUVs deliveries were also strong last month, with Jeep Grand Cherokee sales up 21 percent and Durango volume rising 24 percent.

Other automakers are scheduled to report May sales results later today, with Ford Motor Co. and Nissan Motor Co. forecast to post the biggest gains, analysts say.

15.2 million SAAR

U.S. light-vehicle sales are expected to climb 7 percent to 1.43 million units in May, based on the average estimate of 10 analysts polled by Bloomberg.

The annualized industry sales rate, adjusted for seasonal factors, is forecast to rise to 15.2 million from 14 million a year earlier, based on Bloomberg's average estimate of 17 analysts.

That would mark a rebound from April when the annualized sales rate came in at a disappointing 14.9 million vehicles due to lackluster results from some foreign automakers and weaker shipments to commercial and fleet customers.

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

Ford officials indicated last week the SAAR for May was tracking at about 15.2 million vehicles. And Chrysler said Monday it expected the May SAAR to reach 15.5 million including medium and heavy-duty trucks.

Strong dealer showroom traffic has automakers and analysts expecting overall industry sales to reach as much as 15.5 million vehicles this year, up from 14.5 million last year.

That would keep the U.S. light-vehicle market on pace for its best year since 2007.

Pickups, crossovers hot

Rising consumer spending, attractive financing offers and a recovering housing market have buoyed demand for light vehicles, notably pickups and crossovers. In addition, aging cars and trucks have forced many Americans into the market for replacement vehicles, analysts and industry executives said.

Light truck sales have climbed 11 percent this year through April, while car volume has edged up just 3 percent in an overall market that has advanced 7 percent.

"There's still a great deal of pent-up demand that needs to work its way through the system," Gabelli & Co. auto analyst Brian Sponheimer said. "On the whole, we're still looking at another two years of outperformance for the auto industry as it relates to the broader economy."

Large pickup truck sales surged 27 percent in April and have climbed 20 percent this year.

The housing and construction recovery, relatively affordable gas prices and high inventory levels at the Detroit 3, along with nearly $5,000 or more in cash rebates on the Ford F-Series, Chevrolet Silverado and Ram, will keep pickup demand strong, Kelley Blue Book analyst Alec Gutierrez said last month.

New or redesigned models such as the Honda Accord, Cadillac ATS, Acura RDX, Ford Fusion and Hyundai Santa Fe are also driving demand higher.

Holiday deals

Some dealers said May sales were helped by Memorial Day holiday deals that were extended through early June by some automakers. The early holiday this year also helped drive May sales, some analysts say.

At Phil Long Ford in Colorado Springs, Colo., new car sales manager Michael Gonzales said May was great for new vehicle sales, notably pickups.

"Memorial Day sales were wonderful," Gonzales said. "Our truck numbers seem to be moving enough."

He cited Colorado's improving economy and Colorado Spring's stable military presence as factors driving volume.

Fuel economy also remains a top priority for consumers, Gonzales said, which is helping to drive sales of the Ford Focus small car, mid-sized Fusion sedan and C-Max hybrid.

Said Gonzales: "People are hopefully being more confident in the economy and spending a little more money."

Isabella Shaya, Bloomberg and Reuters contributed to this report.

(Chrysler sales rise 11% on Ram, large SUV, car volume originally appeared on Automotive News, sub. req.)

By David Phillips- Automotive News