Led by strong Jeep sales at FCA and smaller gains at Ford, Honda, Hyundai-Kia and the VW brand, U.S. new-vehicle sales jumped 4.7 percent last month behind robust light-truck demand and holiday deals. It is the third increase in monthly sales this year.
The seasonally adjusted, annualized sales rate for May totaled 16.91 million, according to the Automotive News Data Center, down from a pace of 17.21 million in April but up from May 2017’s 16.82 million rate.
May, one of the biggest months of the year for sales, marks the first time the SAAR fell below 17 million since August 2017, when Hurricane Harvey disrupted demand.
Sales are now up 1.2 percent this year through May in what many analysts still predict will be a down year for overall industry volume.
Favorable economic factors and steady consumer demand for SUVs, pickups and crossovers are driving the market even as interest rates and gasoline prices edge up.
Helped by Memorial Day holiday deals, notably fatter discounts on remaining 2017 minivan, crossover, pickup and SUV inventory, light-truck demand rose 14 percent in May. Car sales slipped 11 percent.
"Despite rising transaction prices and higher fuel costs, the new-vehicle market remains strong. Consumers continue to buy trucks and SUVs at an accelerated pace, more than offsetting the ongoing drop in car sales," said Karl Brauer, executive publisher for Autotrader and Kelley Blue Book. "Economic indicators suggest we’ll see this trend throughout the summer and fall, though talk of tariffs and the specter of $4-plus-a-gallon fuel could end the party, and inventory levels remain relatively high at several automakers."
Company by company
FCA US volume rose 11 percent in May on a surge in Jeep deliveries and higher Ram and retail volume.
The company said Jeep sales rose 29 percent to a May record of 97,287, while Ram deliveries edged up 2 percent. Sales rose 4 percent at Dodge and 159 percent at Alfa Romeo, but slumped 18 percent at Chrysler and 46 percent at Fiat.
FCA said U.S. retail sales in May rose 10 percent to 167,785 and accounted for 78 percent of total volume. Fleet sales accounted for 22 percent of total sales, a slight uptick from 21 percent for May 2017.
General Motors, the biggest seller in the U.S., plans to release sales results on a quarterly basis instead of monthly but analysts expect the company's May U.S. deliveries to rise more than 10 percent, driven by redesigned crossovers and fatter discounts.
At Ford Motor Co., May sales edged up 0.5 percent, with light-truck volume offsetting weaker car demand. Deliveries at the Ford division increased 0.8 percent while Lincoln sales dropped 5.2 percent.
Ford said retail sales rose 3.5 percent last month while fleet shipments dipped 4.6 percent.
Weaker car demand prompted Toyota Motor Corp. to post a 1.3 percent decline in May volume, with sales off 1.5 percent at the Toyota brand and 0.1 percent at Lexus. Toyota said car deliveries slid 11 percent last month while light truck demand rose 5.8 percent.
May sales slipped 4.1 percent at Nissan Motor Co. as the company dials back retail incentives. Volume dropped 3.8 percent at the Nissan division and 7.1 percent at Infiniti. ALG estimates Nissan's average new-vehicle incentive in the U.S. dropped 19 percent to $3,325 last month compared with May 2017. (See chart below.)
Honda Motor. Co. sales in May jumped 3.1 percent on a 9.2 percent increase in light trucks, offsetting a 2.7 percent dip in car deliveries. Volume rose 4.3 percent at the Honda division but slipped 8 percent at Acura.
Hyundai-Kia ends skid
Hyundai-Kia snapped a 17-month skid with a 5.9 percent gain in May volume. Sales rose 10 percent at Hyundai and 1.6 percent at Kia, but dropped 39 percent at Genesis.
The Volkswagen brand, helped by new and redesigned crossovers, saw May U.S. sales rise 4 percent to 31,211. Volume rose 7.1 percent at Subaru, and surged 15 percent at Mazda and 32 percent at Mitsubishi, behind higher light-truck deliveries.
Among other luxury brands, volume rose 0.4 percent at Mercedes, 3.3 percent at BMW, 42 percent at Land Rover, 0.6 percent at Audi and 4.2 percent at Porsche. Deliveries dropped 25 percent at Maserati and 24 percent at Jaguar.