May 2012 Sales Auto Sales Continues to Lead — or Beat — the U.S. Economy

On the same day the U.S. Labor department released May job numbers that were worse than the dismal expectations of economists, Toyota said its May sales rose 87.3 percent. That’s not the man-bites-dog story, here. In May ’11, Toyota was suffering the effects of the Japanese earthquake and tsunami. It’s the domestic year-over-year gains of 30 percent for Chrysler, 12.6 percent for Ford Motor and 10.9 percent for General Motors that stands out as news. GM says its May sales are its best in 33 months.
Even Chrysler’s gain isn’t such big news compared with Ford and GM. The May ’11 Chrysler number was still sufficiently low that the substantial May ’12 gain seemed inevitable. Ford and GM posted healthy gains, at least when compared with those Labor department numbers; just 68,000 new jobs in the U.S. last month, with unemployment rising by one-tenth of a point, to 8.2 percent.
GM’s sales chief, Don Johnson (who leads up Chevrolet beginning next month) on Friday morning reiterated the company’s confidence that Americans will buy 14- to 14.5-million new cars and light trucks this calendar year. Few dispute the automotive sector is taking the lead in the slow, tenuous economic recovery. In the European Union, where the faltering economy threatens to bring down ours, only Volkswagen Group is making any money, leading sales on a sinking ship.
This raises an obvious question: who, in the U.S., is buying new cars and trucks? Even though unemployment remains too high, with the “real” number more than twice the official number, more than 80 percent of the nation is gainfully employed, and they’re replacing old vehicles. Ford says the average vehicle age in the U.S. fleet is 10.8 years old, with the average car age at 11.1 years old. Ford says its commercial fleet sales accounts for 14 percent of overall sales, equal to its number from May ’11. There’s strength in small commercial truck buyers, Ford says, which means that even if we’re not building new homes and office buildings, we’re buying new roofs and getting the A/C fixed.