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Predicting the Market for May

Year-over-year sales might not be as robust as they might be, the prediction is things are going in the right direction compared with April.

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Although U.S. retail sales for May won’t be released until next week, the calculators at J.D. Power and LMC Automotive, based on numbers from the first 19 days of the month, are predicting that while sales will be down compared with May 2018 by 2.1%, things don’t look all that bad, at least as compared with April 2019.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

 

May 2019

April 2019

May 2018

New-Vehicle Retail Sales

1,226,800 units

(-3.1% lower than May 2018)2

1,029,034 units

1,266,343 units

Total Vehicle Sales

1,558,800 units

(-2.1% lower than May 2018)

1,329,349 units

1,592,072 units

Retail SAAR

13.5 million units

13.1 million units

13.7 million units

Total SAAR

17.0 million units

16.4 million units

17.2 million units

What’s more, they estimate that the average transaction price for vehicles in May 2019--$33,457—is up from $32,112, the number for May 2018. Thomas King, senior vice president of the Data and Analytics Div. at J.D. Power, said of that: “For manufacturers, despite lower volumes, higher prices are delivering an increase in net revenue.” However, he noted that there is some excess inventory on lots which means that OEMs will have to adjust “through production cuts or higher incentives.”

And Jeff Schuster, president, Americas Operations and Global Vehicle Forecasts, LMC Automotive, notes, “While sales remain at historically high levels, pressures on the auto industry continue to mount. Chief among these is vehicle affordability concerns, which outweighs the strong economy and record-high consumer sentiment that otherwise should portend continued growth in the U.S.”

What is slightly ironic about this affordability issue is that it seems as though those who are buying vehicles are interested in pricier models.

According to the firms’ numbers, the retail sales of vehicles at less that $30,000 are expected to be down 5.7% in May, even though the whole market will be off just 2.1%.

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