May Auto Sales Down Slightly, Revenue at $51.7 Billion

A new industry estimate shows that) estimates that U.S. new vehicle sales generated $51.7 billion in May, down 0.8 percent from a year ago.  There was one less full weekend for car buying compared with May 2015.

Stronger average transaction prices last month weren’t enough to help automakers post a 29th consecutive month of revenue increases, with the value of new vehicle sales dipping $399.5 million compared with the year-ago month. Incentive spending likely increased an estimated 7.1 percent from a year ago.  The source of the data, TrueCar, estimates sales of new cars and light trucks decreased by 4 percent last month to 1,569,538 units.

“Industry revenue is likely to be somewhat constrained by the calendar this May even as the summer-selling season kicks in,” said Eric Lyman, TrueCar’s vice president of industry insights. “The fact that average transaction prices are still edging up underscores continuing health in demand for new cars and trucks.”

TrueCar estimates the average transaction price (ATP) for a new light vehicle was $32,944 in May, up 3.4 percent from a year ago. Average incentive spending per unit rose by $200 to $3,034. The ratio of incentive spending to ATP was 9.2 percent, up from 8.9 percent a year ago.

“Incentives as a percentage of average transaction price are up but only modestly from a year ago, which is a sign that automakers are still maintaining a relatively healthy approach to such spending,” said Oliver Strauss, TrueCar’s chief economist. “The sustained health of the U.S. economy and consumers’ needs to replace aging vehicles could put total sales near the 18 million mark for 2016.”

Category: General Update