DETROIT (AP) — Memorial Day promotions may have helped the auto industry reverse a four-month downward trend in U.S. auto sales in May.
Nissan and Ford both reported U.S. sales gains for May. Toyota’s sales were down less than 1 percent while GM’s sales fell 1.5 percent compared to last May. Fiat Chrysler also reported a decline of 1 percent.
Analysts expect U.S. sales to eke out a small gain in May after falling 2.4 percent from January through April. A sales increase for May would be the first monthly gain for the year. LMC Automotive and J.D. Power predict a 0.5 percent increase to just over 1.5 million vehicles. Most automakers report May sales Thursday.
Ford reported a 2 percent increase while Nissan said its sales rose 3 percent last month. The Ford and Nissan increases were early signs that May sales could beat analysts’ expectations. Ford sold just over 241,000 vehicles with the F-Series pickup gaining nearly 13 percent to over 76,000. The No. 2 U.S. automaker outsold General Motors, which sold just over 237,000 vehicles due to a 36 percent decline in low-profit business with rental car companies.
Nissan said it sold just over 137,000 vehicles led by the Rogue small SUV with nearly a 19 percent increase. Car sales fell 10 percent but truck and SUVs rose 18.5 percent.
LMC and J.D. Power still reduced their forecast for the full year. The analysts dropped their full-year sales estimate from 17.5 million to 17.2 million. A decrease would be the first in seven years, but a drop of 300,000 still leaves the industry with a healthy sales rate coming off last year’s record sales of 17.5 million.
Automakers fought declining sales with better deals, especially during the Memorial Day holiday weekend, said Dierdre Borrego, senior vice president of automotive analytics at J.D. Power.
Incentives such as rebates and low-interest financing were expected to rise about 7 percent to $3,583 per vehicle, a record for the month of May, J.D. Power said. Big incentives mean automakers are grappling with growing inventories, Borrego said. The average amount of time a vehicle sits on a dealer lot was 71 days in May, the first time it was above 70 days since 2009, according to J.D. Power.
Ford said its inventory dropped from an 83-day supply of new vehicles in April to 72 days in May. GM’s inventory grew by one day to 101. A 60-day supply is considered optimal for automakers.
High inventories could lead to more deals but also layoffs at auto assembly plants as companies try to cut production.