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. "The stock market may be wiser than we all want to admit."


The Pinnacle PortfolioRM Sotheby's set for massive supercar sale in Monterey

RM Sotheby's is bringing a loaded docket of supercars to its annual August auction in Monterey. Called the Pinnacle Collection, the 30-car lineup includes a 1964 Ferrari 250 LM, a 1998 McLaren F1, 1959 Ferrari 250 GT LWB California Spider, and 2006 and 2012 Bugatti Veyrons. It also features a 2005 Ferrari Enzo given to Pope John Paul II that was then auctioned to support relief efforts. RM, which is now partially owned by Sotheby's, has traditionally staged a spectacular event during the Pebble Beach Concours d'Elegance week. The Pinnacle Collection will get its own session, Aug. 13, during the RM Sotheby auction. The cars that have been announced so far can be viewed here.

Top GearBBC trying to lure back Top Gear pair?

The BBC is reportedly trying lure James May and Richard Hammond to return as hosts for a new version of Top Gear. They would serve in a rotation, and the BBC is offering them more than $1.5 million per year, the Telegraph (UK) reported. The new Top Gear could also include other hosts – rumors of candidates have swirled for weeks – and they would collectively replace Jeremy Clarkson who was sacked in March for slugging a producer. Meanwhile, the Telegraph also reported May and Hammond shot the final Top Gear episodes of its season this week, which were shelved after the Clarkson incident.

2016 Chevy Cruze2016 Chevy Cruze on the way

Chevy is teasing the exterior design of the 2016 Cruze, which will be unveiled June 24. From this shot we can see the creased front end, narrow grille, and wraparound headlight casings. The Cruze is a critical entry for Chevy, as it has sold more than 3.5 million of them globally since the car launched in 2008. It will be among the first Chevys to offer Android Auto and Apple CarPlay. The new sedan will go on sale early next year, continuing Chevy's product blitz that includes the Camaro, Impala, Malibu, and Volt.

Related Video:

2015 Ford Mustang GT Line-Lock Burnout | Autoblog Short Cuts

Share This Photo X