May U.S. auto sales were lackluster again -- down 0.5 percent -- but there's some good news tucked inside the headline numbers.
Nobody's going off the rails. Manufacturers are adjusting to their individual situations.
It's increasingly clear that U.S. sales volume peaked last year. The transition from growth to decline is always tricky and can be disastrous (see 2008-09).
But we're unlikely to repeat the dramatic fall-off of the Great Recession, mostly because everybody learned their lesson and aren't repeating bad behavior. But also, the 2008-09 vehicle sales tumble wasn't actually a shift from plus to minus.
We didn't fall off the auto sales peak, which actually came in 2000, but off the 2007 edge of a plateau artificially sustained by rampant overproduction and bloated incentives.
This time around, manufacturers are doing better at balancing production and sales. Yes, U.S. industrywide inventories and incentives are higher than ideal.
But the bulk of the inventory growth is at General Motors, which is deliberately stocking up in advance of late-year extended model-changeover factory shutdowns. Outside GM, industry stock is barely higher than it was a year earlier.
And many of the incentives are aimed at clearing out old 2016 models. Very targeted, very regional and disciplined, as Kelley Blue Book analyst Alec Gutierrez put it today.