U.S. auto sales are continuing to look strong as May comes to a close, say analysts, and Ford
Fully recovered from the March 2011 tsunami that hindered their global production for months, Toyota
A nice gain coming for Ford?
Edmunds released its sales projections for May on Thursday, and while -- as was widely expected -- they're seeing eye-popping year-over-year gains for the Japanese giants, the company's analysts are also seeing strong results for Ford.
That's good news for shareholders of the Blue Oval: The U.S. is far and away Ford's most profitable market, and concerns were raised last month that the company's production of its most popular models might be maxed out. But with Edmunds forecasting a 24% increase in sales over last month's totals for Ford, and a gain of 0.8% in U.S. market share, those concerns may get set aside.
For the overall industry, Edmunds sees a 17.5% increase over April's numbers, and a 31.1% year-over-year increase -- numbers that, should they pan out, would signal that the American economy is continuing to gather strength. Edmunds analyst Jessica Caldwell attributes the increasing sales strength to two factors: Improved access to credit, and "pent-up demand."
"Pent-up demand" is a shorthand allusion to the fact that many consumers have put off new-car purchases for several years because of the tight economy. Those consumers, the theory goes, have been waiting for better economic conditions before entering the car market -- a theory that may be supported by rising sales in recent months.
Cruising in Ford's wake...
If Edmunds is right, Ford's month-over-month gains will be among the leaders -- but the Blue Oval will be far from the only automaker with something to crow about. The company's analysts see Toyota posting a 15.4% gain over April's totals as it continues to fight its way back to the forefront of the U.S. market. (For a sense of just how much trouble Toyota was having at this time last year, note this increase would represent a 89.5% year-over-year sales gain.)
That gain would be enough to bump Toyota's U.S. market share back up to 15%, a full 4.5 points above its year-ago levels -- though still a bit below where the automaker came in last month. Likewise, Honda is expected to show a modest share decline from last month, as Nissan (OTC: NSANY) and Ford are both seen gaining ground.
Even General Motors
The upshot: A promising economic sign
Regardless of how the horse-race details shake out when official results are released next Friday, it's clear that U.S. auto sales are continuing to gain ground. That's a good sign for the overall economy -- auto sales are one of the best indicators of consumers' willingness to spend -- and for shareholders of Ford and GM, both of which make the majority of their profits in North America.
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