Edmunds and KBB project a double-digit decline for GM. Photo credit: DAVID PHILLIPS
U.S. new-vehicle sales are expected to be lower this month than in May 2015, as slower growth in the market combines with a calendar that gives dealerships one fewer weekend to draw in shoppers.
May sales will likely fall about 6 percent from a year ago, according to analysts at LMC Automotive, Kelley Blue Book and Edmunds.com. TrueCar projects a decline of 4 percent.
The forecasts would result in a seasonally adjusted, annualized selling rate of 17.4 million to 17.8 million, compared to 17.4 million in April and 17.7 million in May 2015.
“This month’s sales results are set to fall year-over-year with two fewer selling days combined with retail demand that is holding steady, but not growing,” Tim Fleming, an analyst with KBB, said in a statement today. “While this year may not bring the growth the industry has become accustomed to, it is important to remember that sales are still at record levels and economic factors point to continued strength in the near future.”
Automakers are scheduled to report U.S. sales results on Wednesday, June 1.
May has 24 selling days, down from 26 last year. Any decline this month is likely to be made up in June, which has one additional selling day, and July, which has one more weekend than a year ago.
“It’s easy to look at May’s sales and conclude that the retail car market is losing steam, but it’s too soon to say for sure that auto sales are leveling off,” Jessica Caldwell, director of industry analysis for Edmunds, said in a statement. “As in previous years, the summer months will flush out more incentives from automakers and the urgency that shoppers show in responding to these incentives will give the industry a much better sense of how the market is trending.”
LMC is calling for retail sales to decline 7 percent, while fleet deliveries are flat. TrueCar said it sees retail sales falling 4.5 percent and fleet down slightly.
Edmunds and KBB project a double-digit decline for General Motors, which has been significantly reducing its fleet sales to help bolster residual values. TrueCar shows GM sales falling 7.9 percent, the largest drop among major automakers after a 9 percent slide for Volkswagen Group of America.
FCA’s streak of 73 consecutive year-over-year increases could be in jeopardy.
TrueCar, whose overall forecast for the industry is most optimistic, projects a 1.2 percent increase for FCA. But Edmunds shows FCA sales down 29 units, or 0.01 percent, and KBB anticipates a decline of 2.1 percent.
TrueCar shows Subaru’s streak of gains ending at 53 months, with a 1.3 percent decline, though KBB expects Subaru to eke out a 0.9 percent gain. (Edmunds doesn’t give a projection for Subaru, and LMC doesn’t release forecasts for individual automakers.)
Incentive spending is up 7.1 percent from May 2015 but down 0.4 percent from last month, according to TrueCar. It shows the biggest year-over-year gains in incentives at Ford, FCA and Volkswagen and double-digit incentive declines for Honda, Hyundai and Subaru.