NEW YORK (TheStreet) -- U.S. motorists bought vehicles at a healthy clip in May, with the Big Three Detroit-based automakers reporting strong retail sales for the month. Analysts also noted that shoppers are spending more per vehicle, a sign of confidence and a financial boon to the automakers.
Analysts surveyed by Bloomberg said they expect automakers to post a 1.1% decline in retail sales of light vehicles for May, or about 1.59 million sales. However, that's a smaller dip than was expected, and on an adjusted basis, the monthly rate would imply 17.3 million sales rate for the year, the highest since last August.
General Motors (GM), the No. 1 producer in the U.S., reported a 3% increase in sales from the same month last year, reflecting strong results from its Chevrolet and GMC divisions. GM, reorganized following its 2009 bankruptcy, is benefiting from strong demand for its full-size and mid-size pickup trucks.
Fiat Chrysler Automobiles (FCAU), No. 3 in the market, said May sales rose 4%, propelled by strong performances at its Jeep and Ram pickup truck divisions. It was the 62nd straight month of year-over-year gains for the automaker, which was reorganized as a merged company following the bankruptcy of Chrysler in 2009.
Ford (F) said retail sales fell 1.3% from a year ago, a smaller decline than analysts had forecast. Ford has been coping with a manufacturing changeover in its pickup truck division to accommodate a new aluminum-body F-Series that has reduced the availability of its pickups at dealerships.
Ford said it will shorten its normal two-week summer vacation factory shutdown by a week to produce as many as 40,000 additional pickups. According to reports in the trade press, a supplier of truck frames for F-Series pickups has been unable to keep up with the pace of production.
In April, Ford announced first-quarter profit results that missed analysts' expectations. But the automaker raised its forecast for operating profit margin in 2015, consistent with its expectations that the F-Series launch and production ramp-up was doing well.
Jessica Caldwell, director of industry analysis for Edmunds.com, noted that buyers were borrowing for longer terms to finance their vehicle purchases.
"Car buyers continue to pay more for vehicles and mitigate that cost with longer loan terms and low interest rates," Caldwell said in a statement.. "Average new vehicle loan terms continue to inch up. The average new vehicle loan term was 67.9 months in May, the highest ever. The average new vehicle loan APR fell to 4.6% in May from 4.8% in April."
"With available longer loan terms, lower interest rates and abundant lease deals, people really are getting get more car for the money," she said.
But with car sales gaining for a sixth straight year following the global financial crisis, a question looming over the market is how much longer the pace can continue. Analysts are watching for signs of a pullback, which could be foreshadowed by factors such as rising interest rates, reduced credit availability or a narrowing of prices between new and low-mileage used vehicles.