US auto sales soar in May, 30-percent increase

(AP) - The U.S. stock market took a dive in May and consumer confidence grew shakier. But by at least one measure - new car sales - the picture remains bright.

Analysts are expecting total U.S. sales of 1.4 million cars and trucks in May, up 30 percent from the same month last year. That would make it the best May in five years, according to car buying site TrueCar.com. Carmakers report sales later Friday.

One reason for the big gain: Sales were weak in May of 2011 because Japanese carmakers couldn't get vehicles after the earthquake and tsunami in Japan.

But there are other factors helping sales. Demand remains strong from people who put off big purchases during the recession, analysts say. Lower gas prices also might have enticed some buyers. Gasoline has dropped 32 cents to an average of $3.62 a gallon since peaking at $3.94 April 6. Some experts say it could fall as low as $3.40 between now and Labor Day.

Japanese carmakers will see the biggest sales increases in May. Toyota's sales are expected to nearly double thanks to demand for the new Camry and the new Prius V wagon and Prius C subcompact.

Auto buying site Edmunds.com said Toyota is rapidly gaining back market share it lost to General Motors and Ford in the months following the earthquake.

Honda also is expected to post a strong sales increase. The new CR-V is a big seller for Honda.

TrueCar.com estimates GM's sales will rise 17 percent for the month, while Ford's will increase 11 percent. May's sales pace is expected to come in so strong that forecasting firm LMC Automotive raised its 2012 forecast to 14.5 million, up from 14.3 million. That compares with sales of 12.8 million in 2011.

A need to replace cars seems to outweigh concerns about the economy. The stock market in May is on track for its worst month since last September, and hiring is expected to slow.

A survey released this week by the Conference Board suggested consumer confidence fell sharply in May, although a separate survey by Thompson Reuters and the University of Michigan showed consumer sentiment at its highest level in four and a half years, partly because gasoline prices have dropped.

Consumer confidence is closely watched by car companies, since consumers need to have faith in the economy before they're willing to spend on big-ticket items.