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Despite Slump In May, 2011 Sales Still On Strong Track

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On: Wed, Jun 1, 2011 at 10:52AM | By: Tim Healey

Despite Slump In May, 2011 Sales Still On Strong Track

Sales stalled in May, but that doesn't mean that 2011's sales forecast will be in the dumper. Quite the contrary, according to Automotive News, 2011 is on track to be the best sales year since 2008.

Credit falling gas prices or improved production from Japanese factories affected by the earthquake and tsunami, but either way, this summer is expected to help 2011 show sales growth.

That's despite a May sales rate that is expected to be a seasonally adjusted 12.1 million units. That same rate had exceeded 13 million in each of the previous three months. The seasonally adjusted sales rate is a projection of the anticipated sales for the year, meaning the 12.1 number is for 2011, not just May.

Many consumers are hopping back into the market as Japanese automakers like Honda and Toyota ramp up production following the natural disasters that affected Japan. Many customers have simply been waiting to jump back into the market when production started to reach normal levels again.

High gas prices may have also kept consumers on the sidelines during May, but with the average price beginning to fall in much of the country, that might encourage folks to start visiting showrooms again.

If the industry does sell 13 million units this year, as many experts expect, that would be the best year since 2008's 13.2 million-unit performance.

Obviously, that's a good sign for the budding auto industry recovery. External factors such as a double-dip recession or sluggish housing market could still cause the growth to stall, but the overall numbers are positive signs, and it appears that May's slowdown was just a bump in the road.

Much remains to be seen over the shopping season, and it will also be interesting to see what happens in the fall, as 2012 models begin hitting showrooms in earnest.

There's reason for optimism. But the industry isn't yet out of the woods.


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