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May auto sales expect to be flat
By Kalea Hall
YOUNGSTOWN
May is typically one of the busiest auto sales months of the year, but this year analysts expect sales to come in flat or down.
Automakers will release their May sales reports Thursday.
Kelley Blue Book analysts say new-vehicle sales are expected to remain flat year-over-year at a total of 1.53 million units in May. ALG analysts expect sales to come in at 1.529 million, up 0.3 percent from a year ago.
“Based on five-consecutive months of year-over- year sales declines, our revised estimate for full year sales in 2017 is now 17.2 million units, which still represents a robust and healthy sales environment,” said Eric Lyman, chief industry analyst for ALG, in a statement. “Automakers, particularly GM, continue to work through elevated inventory levels with near record incentive spending.
“However, on a month-over-month basis automaker discounting is down and fleet mix continues to decline, both signals that the industry is adapting to lower overall sales volumes.”
The rise in incentives over the past couple of years shows that it’s a tougher environment for selling today, Kelley Blue Book analyst Tim Fleming explained.
“The pent-up demand has been fulfilled,” Fleming said.
Analysts expect General Motors to post between a 3.1 percent to 4 percent increase in sales. GM is expected to gain market share driven by growth of its sport utility vehicles sales.
“It’s a great time for anyone making SUVs,” Fleming said.
Sales of compact cars, which includes the Lords-town-built Chevrolet Cruze, are expected to drop 4.6 percent, according to Kelley Blue Book analysts.
Midsize cars are projected to see a 11.5 percent decline in May sales. Meanwhile, compact-utility vehicles are expected to post a 4 percent increase in sales.
Analysts see no end in sight for the trend away from cars to utility vehicles.
“Consumers are continuing to defect from the mid-size car segment at a rapid pace,” said Fleming. “Most commonly, they are turning to the compact SUV/crossover segment.”