NEW YORK -

While the subprime sector produced positive results, Fitch Ratings reported losses for U.S. prime auto loan ABS ticked up in May, but overall asset performance remains “solid.”

Fitch indicated that 60-day delinquencies in the prime space crept 7 percent higher in May to 0.30 percent on a monthly basis. But analysts said those delinquencies are within 2013 levels — just 3.4 percent higher.

The firm noticed annualized net losses were virtually unchanged at 0.24 percent in May versus 0.22 percent in April. The rate was elevated versus May of last year, but Fitch explained this situation stemmed from the second lowest record rate of 2013 established that month at 0.17 percent.

“In short, asset performance is strong in 2014 and improved versus the solid pre-recession 2005-2006 period,” Fitch said.

“Auto ABS recovery rates were stable over the first five months of the year and continue to be supported by the ongoing strength in wholesale vehicle values in May, which were 5 percent above a year earlier despite rising supply coming into the market this year,” analysts continued.

Fitch moved along in its latest update by stating the subprime sector posted “solid” results in May, “as losses came down while delinquencies stayed relatively stable.”

Analysts determined subprime 60-day delinquencies ticked up to 2.67 percent month-over-month in May but settled 3 percent below the rate recorded in May of last year.

Fitch also mentioned annualized net losses in subprime posted an unexpected 11 percent decline month-over-month to 3.48 percent in May. The rate was 10 percent better than a year earlier.

“Solid consumer demand, low interest rates, stable vehicle incentive levels and healthy new-vehicle pricing all combined to support wholesale values in May,” analysts said.

“Manufacturers appear to be conscious of over production in 2014 and staying in step with consumer demand for autos, which Fitch views as a positive seeing as used vehicle supply rise in 2014 over 2013 levels,” they went on to say.

Fitch also pointed out that what it described as solid new-vehicle pricing combined with flat incentive spending in May had a positive knock-on effect on used-vehicle values.

“This is a sign of consumers still looking for bargains in the market and thus looking to cheaper used vehicles,” analysts said.

“Used-vehicle sales in 2014 have risen over 2013 levels and may be on track for a record this year, according to Manheim Consulting, which bodes well for auto ABS as demand stays healthy,” they went on to say.

Fitch wrapped up its latest report by mentioning that ratings performance so far this year is easily outpacing that of 2013. Fitch issued 36 upgrades through late June of this year, double the rate of 18 in 2013.

“The rating outlook for the prime sector is positive for 2014, and Fitch expects positive rating actions to continue throughout the year,” analysts said.

Fitch’s indices track the performance of $74.9 billion of outstanding prime and subprime auto ABS, and 63 percent of the index is comprised of prime auto ABS, and the remaining 27 percent subprime auto ABS.