
New-vehicle sales when announced next week by many automakers are expected to show sizeable gains over last year, but a decline versus last month. The seasonally adjusted sales pace, or SAAR, is expected to finish near 14.9 million in May, a notable drop from April’s surprisingly strong 15.9 million level. Affordability issues, driven in part by high interest rates and elevated new-vehicle prices, continue to weigh negatively on sales, as typical monthly payments for new-vehicle loans are well above $700 in today’s market.
Compared to a year ago, the forecast for May reveals a significantly changed market. Sales volume is forecast to jump more than 20% year-over-year, thanks to far better inventory levels. A year ago, according to an analysis of vAuto Available Inventory data, total new-vehicle inventory at retail outlets across the U.S. stood at approximately 1.1 million units. This year, heading into the month of May, inventory was at a two-year high and above 1.9 million units, an increase of nearly 70%. Tight inventory was the key driver of lower sales in 2022. This year, as inventory builds for many brands, demand, not supply, is becoming the market driver.
“New-vehicle sales will show strong gains this month over last year’s levels, and on the surface, this is a bit surprising,” said Cox Automotive Senior Economist Charlie Chesbrough. “Interest rates are substantially higher than a year ago, as are vehicle prices, and yet sales will increase year-over-year. The reason? Vehicle shoppers now have a much better chance of finding something that fits their needs. Pent-up demand, held back by limited product availability last year, is now being fulfilled as inventory levels improve around the country.”
Sales Forecast1 |
Market Share1 |
|||||||
Segment |
May-23 |
May-22 |
Apr-23 |
YOY% |
MOM% |
May-23 |
Apr-23 |
MOM |
Mid-Size Car |
85,000 |
73,759 |
85,994 |
15.2 % |
-1.2 % |
6.3 % |
6.3 % |
0.0 % |
Compact Car |
85,000 |
67,370 |
86,656 |
26.2 % |
-1.9 % |
6.3 % |
6.3 % |
-0.1 % |
Compact SUV/Crossover |
210,000 |
154,862 |
211,508 |
35.6 % |
-0.7 % |
15.6 % |
15.5 % |
0.1 % |
Full-Size Pickup Truck |
190,000 |
162,044 |
195,081 |
17.3 % |
-2.6 % |
14.1 % |
14.3 % |
-0.2 % |
Mid-Size SUV/Crossover |
235,000 |
205,870 |
240,134 |
14.1 % |
-2.1 % |
17.4 % |
17.6 % |
-0.2 % |
Grand Total2 |
1,350,000 |
1,121,835 |
1,365,080 |
20.3 % |
-1.1 % |
|
1 Cox Automotive Industry Insights data. 2 Total includes segments not shown