Analysts in the US expect the May light vehicle market to return over the 15m unit SAAR level, driven by strong retail demand and higher sales of pick-ups.
JD Power and LMC Automotive said that May’s new vehicle retail selling rate is expected to be around a million units above the same month last year.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
JD Power said that new vehicle retail sales in May are projected to come in at 1,157,900 vehicles, which represent a seasonally adjusted annualized rate (SAAR) of 12.5 million units, the highest level since January, and will be the third consecutive month with retail sales in excess of 1m units.
It also said that the full-size pick-up segment is contributing to the overall strong sales pace in May, accounting for 11.4% of industry retail sales, an increase from 11% in April and up from 9.7% in May 2012.
Total light vehicle sales in May 2013 are expected by JD Power/LMC to increase to 1,439,400, up 8% from May 2012 (SAAR up to 15.2m units, up from 14.9m units in April and 13.9m units in May 2012).
LMC Automotive said it is holding the total light vehicle sales outlook for 2013 at 15.4m units. The 2013 outlook for retail light vehicle sales also remains unchanged, at 12.5m units.
“This is the time of year when the automotive industry holds its collective breath as the recent past has dealt with a spring slowdown in demand; however, the current pace suggests full steam ahead for the second half of 2013,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “Economic and market headwinds have been minimised, while demand continues to build momentum.”
The analysts at Kelly Blue Book broadly agreed with the view taken by JD Power/LMC and forecast that new light vehicle sales will hit 15m seasonally adjusted annual rate (SAAR) in May.
“The Big Three will continue to benefit from a strong pick-up truck market, with each domestic automaker anticipated to post gains slightly better than the overall industry average,” said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book. “Meanwhile, Nissan is expected to post the single largest gain in sales this month, thanks to strong demand for the redesigned Altima, Sentra and Rogue, each of which experienced an increase of greater than 30% in sales last month.”
Similar to previous years, Kelley Blue Book expected that a strong surge in new vehicle sales will have occurred during Memorial Day Weekend since manufacturers typically offer some of the most attractive incentives of the year.
North American production forecast revised up
LMC Automotive said that North American light vehicle production year to date through mid-May is up 4%, compared with the same period in 2012. Most major manufacturer volumes are either flat or up slightly, with the exception of General Motors, which is down 4% on the transition of the Impala and weaker large SUV sales ahead of the new models for 2014.
Vehicle inventory levels in early May are put at 3.2m units – a 63-day supply – and consistent with the current level of demand, LMC said. Inventory was at a 55-day supply in May 2012.
LMC Automotive is increasing its forecast for 2013 North American production to 16.0m from 15.9m units. With this increase, 2013 will mark the first time production in the region has been at the 16m-unit level since 2002.
“With several manufacturers at or near capacity, it becomes a balancing act to plan production for the remainder of the year,” said Schuster. “An effective way to manage the near-term demand and increase production levels is to reduce planned summer shutdowns, as the Detroit automakers recently announced.”
