According to preliminary estimates, Light Vehicle (LV) sales grew by 6.8% year-on-year (YoY) in May, to 1.44 million units. After seeing a lengthy growth streak end in April, the market returned to YoY expansion in May, although it was helped by an additional selling day compared to May 2023.
US LV sales totaled 1.44 million units in May, according to GlobalData. The annualized selling rate was 16.1 million units/year in May, up from 15.9 million units/year in April. The daily selling rate was estimated at 55.6k units/day in May, compared to 53.1k units/day in April. Both the annualized rate and the daily selling rate were the best for the year to date, but neither were as strong as December 2023. According to initial estimates, retail sales totaled 1.18 million units in May, while fleet sales finished at approximately 268k units, representing around 18.6% of total sales.
General Motors (GM) had another strong month in May, opening up a lead of 27k units over Toyota Group, even though the latter grew by a very healthy 15.7% YoY. At a brand level, Toyota led the rankings on 185k units, although the gap to Ford was only 10k units, thanks to a robust performance from the latter. Chevrolet occupied its customary position in third, on 160k units. The Ford F-150 remained the best-selling vehicle in May with 43.8k units, but it is only slowly eroding the lead that the Toyota RAV4 built up in the earlier months of the year, as the RAV4 recorded 42.7k sales in May. Compact Non-Premium SUV’s total market share slipped to 20.5% in May, the lowest since August 2023, but the segment still comfortably led all others. Midsize Non-Premium SUV was second on 15.5%, while Large Pickup continued its modest recent recovery, as its share was up marginally month-on-month (MoM), to 13.3%.
David Oakley, Manager, Americas Sales Forecasts, GlobalData, said: “May is usually an important month for the automotive industry, with warmer temperatures and Memorial Day sales events traditionally bringing consumers out to buy vehicles. This year was no different, with incentives being significantly higher than a year ago, allowing for some buyers to make deals that were not possible when inventory levels were low. With that said, there is still a degree of variance in the performance of different OEMs. Brands that offered a variety of fuel options, including Hybrids and Plug-in Hybrids, appeared to thrive in May, underlining that the industry faces more than just a binary choice between Internal Combustion Engine (ICE) vehicles and Electric Vehicles (EVs). Leasing is also clearly making a comeback, as it provides both a more affordable option for consumers facing eye-watering financing costs, and a workaround for EVs that would not otherwise qualify for tax credits”.
Growth in US inventory continues, but has slowed as production returns to levels that are able to match demand. Inventory in April rose by 49% YoY, but was just 3.5% higher than in March 2024. Days’ supply climbed to 51 days from 48 days in March. Given the robust sales in May, inventory is projected to increase just slightly from April’s level, while days’ supply is expected to have slipped to 48 days. Although availability has improved significantly in the past year, OEMs appear to be managing closer to equilibrium thus far in 2024.
The forecast for US LV sales is pushing closer to the 16.2 million level but continues to round down to 16.1 million units, a 4% increase from 2023. In addition to retail, fleet sales have also been consistent, and we now expect share to be close to the 19% mark for the year – the highest level since 2019. If the market strength continues into the summer selling season, we will likely be looking at a further upward revision to the forecast for the year and into early 2025. The current outlook for LV sales in 2025 is holding at 16.6 million units, an increase of 3% YoY.
Jeff Schuster, Vice President Research and Analysis, Automotive, said: “Consumers continue to replace aging vehicles and as availability improves or levels out in all segments, we could see mild upside potential to the near-term outlook. The combination of moderating prices and an overall stable economic environment may prove to be the right recipe for growth to hold. If manageable lease payments improve further, consumers will have another lever to combat the likelihood of higher interest rates for a longer period. The wildcard may be the impact of the election on the economy and policy as the year progresses.”
Global outlook: The global LV selling rate improved to 86.1 million units/year in April, up from an average of 83.0 million units/year in Q1 2024. Volumes rose by 3.4% from April 2023 as solid growth continues, but at an expected slower pace. Below the topline, the results were mixed, with Europe outperforming all major markets, increasing by 15% YoY. China’s domestic sales increased by just 3% as consumers face mounting challenges that the price cuts did not override. North America, Korea, and Japan all contracted in April, due in part to base effects and fewer selling days. The 2024 outlook for global auto sales is virtually unchanged from last month at 89.1 million units, an increase of 3% from 2023. Pricing trends, geopolitical risk and the overall performance of economies around the world continue to be key drivers in the near-term auto market, with some downward pressure in Asia that could impact how the year finishes.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center. For more details on GlobalData’s designated Global Light Vehicle Sales Forecast module, click here
