June 1, 2015—Sales in May could put the U.S. auto industry on its way to delivering 17 million new vehicles this year, the highest level seen since 2001, according to The Wall Street Journal.
On Tuesday, automakers will report their May sales, and analysts are forecasting 1.59 million vehicles for the month. While that is down 1 percent from the same time last year, these results would put auto sales on pace for a seasonally adjusted annual rate of 17.3 million vehicles, based on the first five months of the year, according to market researcher Kelley Blue Book.
Most manufacturers will have a slight decline in volume due to one less selling day for the year. Fiat Chrysler Automobiles could be an outlier as high Jeep demanded is expected to pull the automaker’s year-over-year increase in sales to a streak of 62 months, according to Kelley Blue Book.
Whether or not sales will be able to keep up this pace for another seven months is being debated amongst analysts, who are toggling between forecasts for the year. Some predict sales to finish just short of 17 million, at 16.9 million. Others say that the strong consumer enthusiasm leading into the second-half of the year will help the industry reach 17 million.
“We feel very comfortable with our estimation for 16.9 million units sold on the year,” said Kelley Blue Book’s Alec Gutierrez, according the The Wall Street Journal. “With that being said, it looks like there is an increasing probability that sales will hit 17 million to 17.1 million units. After seeing the final tally for May, we will likely regroup, review the numbers, and potentially increase our forecast.”
Cheap gas, better leasing options and the fact that many cars currently on the road are over 10 years old are pushing shoppers to buy, which is good news for auto makers.
Hitting 17 million would be a milestone and would bring an end to the year-over-year gains in the industry had enjoyed since the recession. In 2000, the industry hit its peak, when automakers sold 17.3 million vehicles.
“We expect hitting that mark to be bittersweet, though, as growth rates are expected to slow to a near halt and could even contract with the economy post-2016 and 2017,” said LMC Automotive’s Jeff Schuster, according the The Wall Street Journal.
