DETROIT (Reuters) - Chrysler Group posted a 30 percent increase in May new-car sales in the U.S. market but fell short of what analysts had expected.
Chrysler, controlled by Italy’s Fiat FIA.MI, reported May sales of 150,041 vehicles, up from 115,363 in the same month last year. While it was the best May sales performance for Chrysler in five years, the results were below several analysts’ estimates.
The rest of the U.S. auto industry is scheduled to report sales results later Friday. Economists polled by Thomson Reuters expect an annual sales rate for the month of 14.5 million vehicles.
Some industry officials expect the rate to be lower, however, as warmer weather earlier in the year pulled demand forward and led to stronger-than-expected sales. In addition, falling gas prices have reduced the pressure on consumers to get rid of gas-guzzlers and buy more fuel-efficient cars.
Auto sales have been one of the bright spots in the economy for several months and the monthly sales results offer an early snapshot of consumer demand.
Sales have shot up this year despite cooling consumer confidence and mixed economic data that illustrates how shaky the recovery has been over the last three years.
One factor fueling the sales growth has been Americans’ increasing need to replace their aging cars and trucks, which are now a record 10.8 years old on average.
Higher fuel prices in the first quarter prompted some consumers to swap older, less fuel-efficient models to lock in fuel savings. According to Swiss bank UBS, 63 percent of dealers said higher gasoline prices increased demand in the first quarter.
With gas prices falling again, the pace of new-car sales may moderate in the second and third quarters, but the underlying consumer appetite for new cars and trucks as a result of pent-up demand remains strong, UBS analyst Colin Langan said.
Reporting By Ben Klayman and Deepa Seetharaman; editing by John Wallace