U.S. auto sales rose in May as demand for sport-utility vehicles and pickup trucks continued to buoy sales despite rising gas prices.
The Wall Street Journal reported that deliveries likely increased nearly 5% during the month compared with the same period in 2017, according to analyst estimates, partly because of one more selling day compared with last year. May is often the biggest month of the year for auto sales, with Memorial Day sales driving car shoppers to dealerships to kick off the summer selling season.
SUVs and pickup trucks accounted for about 67% of sales in May, according to J.D. Power, the highest level ever for May. This mix benefited auto makers like Ford Motor Co. and Fiat Chrysler Automobiles NV, whose lineups skew heavily toward SUVs and pickups, but hurt auto makers like Toyota Motor Corp. and Nissan Motor Co. who are long known for their strength in sedans.
Ford and Fiat Chrysler are turning away from the sedan market, under the assumption consumer preference has permanently switched to SUVs and trucks. Japanese auto makers, meanwhile, continue to invest in sedans and roll out redesigned models.
The richer mix of SUVs and pickup trucks — which carry higher prices than passenger cars — drove the average transaction price up nearly $1,200 in May compared with last year, while discounts remained flat at about $3,665 per vehicle, J.D. Power said.
The shift toward trucks and SUVs continues unabated even though consumers are paying more at the pump. Regular gasoline surpassed an average of $2.90 a gallon nationally this week, according to the U.S. Energy Information Administration. Prices are expected to continue to rise and could top $3 a gallon through the summer driving season.
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