U.S. light-vehicle sales are projected to fall for the fifth straight month in May as the industry limps into the usually robust summer selling season.
Estimates from four forecasters call for declines of 2.1 percent to 3.2 percent from May 2018. Most automakers are scheduled to report May results on Monday.
The seasonally adjusted, annualized selling rate is projected to range from 16.9 million to 17.0 million, in line with full-year estimates for sales to come in below 17 million for the first time since 2014.
May 2018 was a particularly strong month for the industry with sales of 1.592 million and a SAAR of 17.26 million.
"It's going to be an up-and-down year," Jeremy Acevedo, Edmunds' manager of industry analysis, said in a statement. "Automakers are still figuring out how to balance supply with declining demand, but incentive budgets aren't big enough for dealers to offer deep discounts on a consistent basis. And when those bargains go away, so do the shoppers."
Estimates of incentive spending in May vary.
TrueCar's ALG said average incentive spending fell 10 percent from a year ago to $3,359 per vehicle. It also estimates that the average transaction price for a new light vehicle rose to $34,137, up 3.4 percent from a year earlier.
J.D. Power/LMC Automotive said incentive spending per unit in May is on pace to be $3,722, up $25 from last year, as automakers bumped up some of their Memorial Day discounts.
"The expected sales decline in May, coupled with weak sales year-to-date has left the industry with rising inventories of unsold vehicles," Thomas King, senior vice president of J.D. Power's data and analytics division, said in a statement. "Manufacturers are responding with larger discounts to take advantage of the Memorial Day weekend, which is one of the busiest car-buying periods of the year."