Cox Automotive Forecast: Despite Higher Incentives and Improved Inventory, New-Vehicle Sales Growth Remains Modest in May

The annual new-vehicle sales pace in May is forecast to finish near 15.8 million, an increase from last May’s 15.5 million level and up 0.1 million from April’s 15.7 million pace. May’s sales volume is expected to rise to 1.42 million units, a 3.5% increase from one year ago and a 6.4% increase from April. More selling days are helping this month’s total as this May has 26 sales days, one more than last year and last month.

Cox Automotive forecasts that May's new vehicle sales will show improvement over last year, driven by significantly increased inventory levels leading to more appealing incentives. However,

affordability issues, driven partly by high interest rates and elevated new vehicle prices, continue to weigh negatively on sales, as typical monthly payments for new-vehicle loans are above $750.

The seasonally adjusted annual rate SAAR, or sales pace, in May is forecast to finish near 15.8 million, up from last May’s 15.5 million level and a modest uptick from last month’s 15.7 million pace. Sales volume is expected to rise 3.5% over last year and 6.4% above last month. There are 26 selling days this May, one more than last year and last month.

At the start of May, new vehicle inventory was at 2.84 million units, 51% above year-ago levels and the highest