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Weekly Recap: The implications of strong new car sales

New car sales are on a roll in the United States this year, and analysts are optimistic the industry will maintain its torrid pace. Sales increased 1.6 percent in May and reached an eye-popping seasonally-adjusted selling rate of 17.8 million, the strongest pace since July 2005, according TrueCar research. That positions the industry for one of its strongest years ever, as consumer confidence, low interest rates, low fuel costs, and an influx of new products propel gains. In addition to the positive economic factors, May also featured warmer weather across much of the US, an extra weekend, and it came on the heels of relatively weak April sales. Analysts suggest income tax refunds and the promise of summer driving and vacations also traditionally help May sales. "While 2015 will be one of the best years in the history of the US industry, in some ways it may be the very best ever," IHS Automotive analyst Tom Libby wrote in a commentary. "Not only are new vehicle registration volumes approaching the record levels of the early 2000s, but now registrations and production capacity are much more closely aligned so the industry is much more healthy." Capacity, an indicator of the auto sector's health, is also expected to grow. Morgan Stanley predicts it will eventually hit at least 20 million units per year, as many companies, including General Motors, Ford, Tesla, and Volvo are investing in new or upgraded factories. "The best predictor of US auto sales is the growth in capacity, and frankly, we're losing count of all of the additions – there's literally something new and big every week," Morgan Stanley said in a research note. Transaction prices, another telling indicator, also continue to show strength. They rose four percent in May to $32,452 per vehicle, and incentives dropped $10 per vehicle to $2,661, TrueCar said. "New vehicle sector and segment preference indicates consumers are confident about the economy and their finances," TrueCar president John Krafcik said in a statement. Still, Morgan Stanley noted the robust sales did little to immediately impact automaker stock prices and suggested it might be a prime time to sell if sales reach the 18-million pace. "Perhaps the biggest reason may be that investors have seen this movie before," the firm wrote.

Seized drug dealer's Corvette Z06 joins Texas police fleet

A police department in Texas caused a stir after they posted pictures of their hot new ride on social media last week. This 2007 Corvette Z06 with dark-tinted windows once belonged to a drug dealer, but was seized in a DEA raid. The feds awarded the Corvette to the New Braunfels Police Department for their help in bringing down the drug distribution ring in the area. When police posted images of the car on their Facebook page, some followers were angry that tax dollars were spent on such an extravagant car. New Braunfels PD were quick to defend themselves. "To be clear, this vehicle was awarded to NBPD as part of an asset distribution from the Federal DEA criminal case of a large drug distribution ring in our area," the New Braunfels PD wrote on their Facebook page. "NBPD was instrumental in helping bring down that drug enterprise. Property seized during the course of an investigation is only awarded to the law enforcement agency after a court has determined that the suspect was involved in criminal activity and the proceeds (money) from that activity (i.e dealing drugs) paid for the items seized. Therefore, no property is given to a law enforcement agency prior to the investigation being completed and tried in a court of law." With a 505 horsepower V8 engine this murdered-out Corvette could outrun most speeders and getaway drivers. As is often the case in instances such as this, however, the 'Vette will be used in community outreach programs rather than as an active-duty cruiser. The department is currently holding a contest asking kids between 8 and 16 years old to find a name for the sports car. Currently, the most liked name is 'Optimus Crime'. A final winner will be chosen by the department on September 22. The kid who picks the name will earn bragging rights, plus a ride in the Corvette when its unveiled at the Comal County Fair Parade this weekend. Related Video:

VW Finds CO2 'Irregularites', SEMA Recap, and More | Autoblog Minute

Volkswagen's diesel emissions scandal gets a new wrinkle, US regulators hit Takata Corporation with a substantial fine, and we head to Vegas for a look at tuner paradise at the 2015 SEMA show. Autoblog Senior Editor Greg Migliore reports on this edition of Autoblog Minute Weekly Recap. Acura Chevrolet Honda Mazda Mitsubishi Toyota Autoblog Minute Videos Original Video Acura Legend