A recent forecast from Cox Automotive indicates that May new vehicle sales in the United States should be an improvement from a year ago, thanks to increased inventory levels resulting in more appealing incentives.
However, the company also noted that vehicle affordability issues, driven partly by high interest rates and higher new vehicle prices, continue to have a negative impact on sales. They said typical new vehicle monthly payments for loans are above $750.
“Sales in May generally improve(s) over April as nicer weather brings more shoppers out to dealer lots,” said Cox Automotive Senior Economist Charlie Chesbrough in a statement. “Memorial Day weekend often sees many low-price promotions from manufacturers as they try to build strong sales momentum for the summer season.”
The seasonally adjusted annual rate SAAR in May is anticipated to finish around 15.8 million, which would be an improvement from May 2023’s 15.5 million level and a decent increase from April’s 15.7 million pace. The sales volume is expected to jump 3.5% over the same period in 2023, and 6.4% above last month. There is one additional selling day this year compared to last month and May 2023.
Cox Automotive said U.S. new vehicle inventory was at 2.84 million units in May, 51 per cent above 2023 levels and the highest point since late 2020. “But prices have barely budged compared to the same time in 2023,” they said. Meanwhile, incentives are running “nearly twice the level seen a year ago.”
