May a tough month for US light vehicle sales

Jun 06, 2016

Jeep brand sales in the US posted a 32nd-consecutive month of year-on-year sales gains, boosted by models such as the Renegade.

As we warned last month, year-on-year comparisons of US light vehicle sales are likely to be disappointing even though the industry is still on track for another 17m unit year.

May sales were a good example. Total light vehicle volume fell 6.1% to slightly more than 1.5m, down nearly 100,000 from May 2015. That’s the largest y-o-y percentage decline since August 2010.

May’s totals translated to a seasonally adjusted annualised rate (SAAR) of 17.45m, down 250,000 units from last May’s SAAR of 17.7m.

Estimated average transaction prices rose 3.5% from a year ago but estimated incentive spending jumped 7.1% with GM putting the most cash on the hood. Ford spending, which has been fairly controlled, rocketed up 28.4% in May.

Fiat Chrysler was one of the few automakers to report sales growth in May.  An 84.0% leap in minivan sales and a 13.7% increase in Jeep deliveries overcame an 11.5% slump in car sales. For the second consecutive month, FCA US sold more light trucks in May than any other automaker.

A 25.0% plunge in car sales dragged Ford into the red last month. Total volume was off 6.1% compared to last May. Lincoln did report a 6.9% gain as utility sales grew 16.0%.

General Motors’ sales fell 18.0%, the biggest shortfall of any major automaker. GM had been trimming fleet sales, which had affected total volume, but the May plunge was more than expected. Sales fell in every segment and every brand.

GM says it will bump up incentives and add special sales programs for June.

Subaru was the only Japanese company to post better numbers and it set another monthly record. Toyota took the worst fall with sales deficits in both Toyota and Lexus brands.

Both Hyundai and Kia set new monthly sales records as the Korean automakers snapped up a full point of market share.

Of the European carmakers, only Jaguar Land Rover and Volvo beat their May 2015 numbers. Jaguar sales zoomed 79.7% thanks to the new XE and F-Pace utility. The XC90 is carrying the load for Volvo with 44.6% of total Volvo sales.

Passenger car sales fell 16.0% from May 2015. Market share dropped 4.7% to 40.3% of total sales. Cars did pick up 0.3% of share compared to April 2016. The Toyota Camry was the sales leader.

Minivan sales rose 11.7% with FCA’s trio (Chrysler Pacifica, Chrysler Town & Country, Dodge Grand Caravan) taking the lion’s share – 41.3% of total segment deliveries - but the Honda Odyssey was the bestseller.

Commercial vans gained 0.3% of market share compared to May 2015, but lost the same amount compared to April 2016. Segment sales were up 5.2% in May and are now 19.4% ahead of the first five months of 2015.

Ford, led by the Transit, dominated the segment with 52.9% of total van sales. The Ram ProMaster City was the bestselling compact van.

Sales of crossovers and SUVs rose a modest 2.3% but that brought the segment share to 39.4%. Though petrol prices have risen about 5.0% since April and look to continue upward, Americans’ love of utilities persists. The segment likely will soon become the largest. Jeep remains the dominant brand though the bestseller was the Toyota RAV4.

Pickup sales fell by 1.6% mostly due to a 3.1% shortfall in deliveries of full-size pickups. The Ford F-series was the only big pickup to beat its May 2015 total. Sales of mid-size pickups rose 6.5%. Pickup market share grew 0.7% to 14.1%.

Mercedes squeaked by BMW in the luxury segment in May and widened its lead over Lexus in year-to-date volume. Market share of luxury brands was unchanged at 11.0%.

Experian reported that leasing grew to 31.1% of new vehicle transactions in the first quarter of this year. In the same period, the length of new vehicle loans rose to 68 months and the amount financed hit $30,032. All of these are new records.

These increases are driven in large part by the rise in average transaction pricing.  This, in turn, is driven by consumers’ choices of more expensive utilities and pickups and dealers’ efforts to close the sale as the industry strives for another record year.

* indicates a sales record.

**Volkswagen Group figures include Audi, Bentley, Porsche and Volkswagen brands

Other includes estimated sales for Aston-Martin, Ferrari, Lamborghini, Lotus, Rolls-Royce and Tesla

Source: just-auto