Pent-up demand keeps on driving car sales

Detroit - The auto industry's recovery maintained a steady pace in May as Chrysler reported a 30 percent gain in new-vehicle sales, Ford said its sales climbed 13 percent and General Motors reported an 11 percent increase.

Total sales during May for all manufacturers were forecast at about 1.4 million vehicles, compared to 1.18 million in April. The closely watched, seasonally adjusted annual sales rate was estimated in the mid-14-million range.

Sales in the first five months of this year had risen 10 percent from the same period in 2011. Despite a sluggish economic recovery, consumers are increasingly replacing their older vehicles with new models and seeking out fuel-efficient small cars to cope with volatile gasoline prices.

"Pent-up demand continues to fuel auto sales at a steady and sustainable level in May," said Jesse Toprak, chief market analyst for the auto research website, TrueCar.com. "All major manufacturers will see double digit growth this month."

The gains at Chrysler marked the 12th consecutive month of year-over-year increases of 20 percent or more. The company reported strong results for its SUVs and pickup trucks, as well as its revamped line of passenger cars.

"In spite of a tremendous amount of global economic uncertainty, the U.S. new vehicle sales industry continues to power ahead," said Reid Bigland, head of domestic sales for Chrysler.

Ford said its gains were fueled in part by a 29 percent rise in sales of F-Series pickup trucks. The strength of the pickup market often correlates to better economic conditions in the construction industry and related businesses.

GM said its monthly results were its best in nearly three years. Among the foreign automakers that have reported May results, Volkswagen said its sales increased 28 percent over last year.

Industry analysts forecast sales in May to be the highest for the month since 2007. Sales were expected to climb as much as 30 percent over May 2011, when the overall market was depressed due to inventory shortages for Japanese automakers impacted by the tsunami and earthquake.

But the Japanese companies have almost fully recovered from disruptions in the supply chain and are expected to post healthy sales increases this May.