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Chrysler US sales up 11 percent in May

Tom Krisher and Dee-Ann Durbin, AP Auto Writers

DETROIT (AP) -- Chrysler's U.S. sales rose 11 percent in May, a sign that auto sales rebounded from a slight dip in April and will continue to boost the U.S. economy.

The Auburn Hills, Mich., automaker says it sold almost 167,000 cars and trucks last month. It was Chrysler's best May since 2007 and its 38th straight year-over-year monthly sales gain.

The performance surprised some industry analysts who expected a decline for the month. Ram pickup truck sales were strong, up 22 percent over a year ago to almost 32,000.

Chrysler's numbers support analysts' predictions of a strong May for the auto industry. Memorial Day sales and price cuts from Nissan were expected to draw customers back into dealerships after a slower-than-expected April. All automakers report U.S. sales on Monday.

Analysts predicted that sales will rise 7 percent over May 2012 to around 1.4 million vehicles, putting the industry back on pace for full-year sales of more than 15 million. In April, the annualized rate dropped below 15 million for the first time in six months, causing some concern that the industry's recovery could be slowing.

Chrysler even predicted that total U.S. sales in May would hit an annual rate of 15.5 million.

"This quick rebound is just another example of how the auto industry is currently one of the most resilient areas of the overall economy," said Jessica Caldwell, a senior analyst at car-shopping site Edmunds.com.

Nissan's sales likely surged thanks to competitive pricing. Car buying site TrueCar.com estimated that Nissan's sales jumped 25 percent in May, the biggest increase of any major automaker.

Nissan announced in early May that it was lowering the price of seven models, including the recently redesigned Altima sedan. Cars and trucks with the higher sticker prices are now being discounted. That's what drove Nissan's May sales increase, said Larry Dominique, a former Nissan product chief who is now executive vice president of TrueCar.

"That certainly is stimulating a lot of sales and interest," Dominique said.

Nissan's goal was to hold average sales prices steady by cutting sticker prices while trimming discounts such as rebates by a like amount, Dominique said. TrueCar estimates that Nissan cut its incentive spending by 34 percent in May, to an average of $1,821 per vehicle. That's $660 lower than the industry average.

Memorial Day offers — such as Chevrolet's $500 cash rebate on top of other discounts — also juiced sales, Kelley Blue Book analyst Alec Gutierrez said.

Toyota Motor Co., whose Camry and Corolla sedans have been struggling in the face of newer rivals like the Honda Accord and Ford Fusion, is expected to report a slight decline in sales for May.

Chrysler also reported strong sales of the Jeep Grand Cherokee SUV, which was up 21 percent last month as the Jeep brand gained 1 percent. But Chrysler brand sales fell 2 percent on a poor performance from the 300 large sedan with sales down 18 percent.

The Ram pickup and other trucks appear to be selling well as home construction continues to see double-digit growth. That benefits the Detroit automakers, who sell the vast majority of pickups in the U.S. Kelley Blue Book expects General Motors Corp., and Ford Motor Co. to see sales gains in the 6 percent to 8 percent range thanks to a 20 percent rise in pickup sales.