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U.S. auto sales in May likely driven by heavy discounts -analysts
June 1, 2017 / 1:40 PM / 7 months ago

U.S. auto sales in May likely driven by heavy discounts -analysts

DETROIT, June 1(Reuters) - U.S. new vehicle sales figures in May were likely propped up by heavy discounts, say industry analysts who expect that demand in the month was little changed or up just slightly after two months of falling sales.

Ford Motor Co said its U.S. sales inched up 2.2 percent to 241,126. Nissan Motor Co said U.S. sales in May rose 3.0 percent, to 137,471, amid record demand for its trucks, crossovers and SUVs.

After demand fell in March and April, analysts estimated May sales at just over 1.5 million. The seasonally adjusted annual rate of sales in May was estimated at 16.8 million to 16.9 million vehicles, about the same as April. A year earlier, sales stood at 17.55 million vehicles.

Early reports indicate that sales over the three-day Memorial Day weekend were helped by heavy discounts.

“While demand for new vehicles is still relatively strong, it’s a bit of smoke and mirrors,” said Jessica Caldwell, executive director of industry analysis at Edmunds, the car shopping website.

Manufacturers and dealers “really pushed the deals over the holiday weekend to prop up their May numbers,” she said. “Incentives were up sharply, and it seems automakers are putting more cash on the hood to nudge car shoppers to buy versus lease.”

General Motors dealers were offering discounts of up to $12,000 on the full-size Chevrolet Silverado pickup, while some dealer discounts on Ford Motor Co’s F-series pickups were more than $10,000 on 2017 models and more than $14,000 on leftover 2016 models. The 2017 model year started eight months ago.

Some automakers also continued to cut back on low-margin sales to rental car fleets. GM said its fleet sales in May were about 10 percent of its total sales, compared with an industry average of around 20 percent. (Reporting by Paul Lienert in Detroit; Editing by Bernadette Baum)

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