Click to enlarge.
US new-vehicle sales for May 2024, including retail and non-retail transactions, are forecast at 1,446,800, a 2.9% increase from May 2023 on a selling day adjusted basis, according to a joint forecast from J.D. Power and GlobalData.* May 2024 has 26 selling days, one more than May 2023. This sales volume, not adjusted for the number of selling days is an increase of 7% from a year ago. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is estimated to be 16.1 million units, up 500,000 from May 2023.
“Expected new-vehicle sales results for May represent a mixed bag of outcomes. On the positive side, the total sales pace will exceed 16 million units for the first time this year. Also, discounts are similar to last month, despite May being a month in which discounts traditionally increase to take advantage of elevated shopping activity during the Memorial Day weekend. This is good news for manufacturer and retailer profitability. However, the industry continues to produce more vehicles than are being sold, leading to rising inventories and increasing the likelihood of elevated discounts as the year progresses,” said Thomas King, president of the data and analytics division at J.D. Power.
US – Quick Summary
- The average new-vehicle retail transaction price in May is expected to reach $45,033, down $1,045 from May 2023. The previous high for any month—$47,329—was set in December 2022.
- Average incentive spending per unit in May is expected to reach $2,640, up from $1,782 in May 2023. Spending as a percentage of the average MSRP is expected to increase to 5.3%, up 1.7 percentage points from May 2023.
- Average incentive spending per unit on trucks/SUVs in May is expected to be $2,710, up $877 from a year ago, while the average spending on cars is expected to be $2,341, up $767 from a year ago.
- Retail buyers are on pace to spend $50.9 billion on new vehicles, up $3.3 billion from May 2023.
- Trucks/SUVs are on pace to account for 80.6% of new-vehicle retail sales in May.
- Fleet sales are expected to total 259,723 units in May, down 3.4% from May 2023 on a selling day adjusted basis. Fleet volume is expected to account for 18% of total light-vehicle sales, down 1.2 percentage points from a year ago.
- Average interest rates for new-vehicle loans are expected to increase to 7.1%, 17 basis points higher than a year ago.
EV Forecast
“We’re seeing a ‘low tide moment’ for EVs right now, but it’s unclear how long it will last. EV market share peaked at 8.8% in April, with May expected to be down 0.4 percentage points,” said Elizabeth Krear, vice president, electric vehicle practice at Power.
“Results from the J.D. Power 2024 Electric Vehicle Consideration Study show that, for the first time since the study’s inception in 2021, EV shopper consideration has dropped from the previous year. This year, 24% of shoppers say they are ‘very likely’ to consider purchasing an EV, which is down from 26% a year ago. Shoppers who are rejecting EVs point to lack of charging station availability, purchase price, limited driving distance per charge, time required to charge and inability to charge at home or work.
“The decline in shopping interest for EVs comes as the industry has reached an all-time high in EV availability. EV availability is at 54.3—the highest it’s ever been on a 100-point scale—as it moves toward parity with gas-powered vehicles. EV adoption within the J.D. Power EV Index fell to 16.2 in April, hitting its lowest point since August 2021. EV retail share, while having some bright spots when it comes to certain models, is not growing at the same pace as EV availability. This is bringing aggressive conquest sales programs to the EV segment, so we’ll see if shoppers find them attractive enough,” said Krear.
Global Sales
“The global light-vehicle selling rate accelerated in April to 85.9 million units from 84.3 million units in March. After a slower start to 2024, the April year-to-date selling rate has risen to 83.9 million units and is expected to continue to climb as the year progresses and the typical distortions in the first quarter are averaged out,” said vice president of research, automotive at GlobalData.*
“From a volume perspective, April increased 3% year over year to 6.8 million units, slightly weaker than initial expectations for the month, but still a solid performance at the topline. Below the topline, the results were mixed, with Europe outperforming all major markets, increasing 14% year over year. China’s domestic sales increased 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 effect and fewer selling days. Japan’s selling rate recovered as previously suspended production at Toyota and Daihatsu restarted.
“The global selling rate in May is expected to increase significantly to 89 million units on volume growth of 2%. The wildcard this month is expected to be China, which is currently projected to contract 0.4%. If the Chinese market can rebound off recent weakness, global growth will be driven higher. Japan is expected to post a near double-digit increase in May, fueled by stronger mini-vehicle production.
“Given the higher volatility and inconsistent performance across markets, the outlook for 2024 is virtually unchanged at 89.1 million units, a 3% increase from 2023. There is some downward pressure from markets across Asia that could pull the global market down slightly as we progress through 2024. Pricing trends, geopolitical risk and the overall performance of economies around the world continue to be key drivers in the near-term auto market,” said Schuster.
AutoInformed on
*GlobalData
GlobalData says that “4000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.” J.D. Power is also part of GlobalData. Inquiries at: customersuccess.automotive@globaldata.com.
May 2024 US New Vehicle Sales Forecast Up
Click to enlarge.
US new-vehicle sales for May 2024, including retail and non-retail transactions, are forecast at 1,446,800, a 2.9% increase from May 2023 on a selling day adjusted basis, according to a joint forecast from J.D. Power and GlobalData.* May 2024 has 26 selling days, one more than May 2023. This sales volume, not adjusted for the number of selling days is an increase of 7% from a year ago. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is estimated to be 16.1 million units, up 500,000 from May 2023.
“Expected new-vehicle sales results for May represent a mixed bag of outcomes. On the positive side, the total sales pace will exceed 16 million units for the first time this year. Also, discounts are similar to last month, despite May being a month in which discounts traditionally increase to take advantage of elevated shopping activity during the Memorial Day weekend. This is good news for manufacturer and retailer profitability. However, the industry continues to produce more vehicles than are being sold, leading to rising inventories and increasing the likelihood of elevated discounts as the year progresses,” said Thomas King, president of the data and analytics division at J.D. Power.
US – Quick Summary
EV Forecast
“We’re seeing a ‘low tide moment’ for EVs right now, but it’s unclear how long it will last. EV market share peaked at 8.8% in April, with May expected to be down 0.4 percentage points,” said Elizabeth Krear, vice president, electric vehicle practice at Power.
“Results from the J.D. Power 2024 Electric Vehicle Consideration Study show that, for the first time since the study’s inception in 2021, EV shopper consideration has dropped from the previous year. This year, 24% of shoppers say they are ‘very likely’ to consider purchasing an EV, which is down from 26% a year ago. Shoppers who are rejecting EVs point to lack of charging station availability, purchase price, limited driving distance per charge, time required to charge and inability to charge at home or work.
“The decline in shopping interest for EVs comes as the industry has reached an all-time high in EV availability. EV availability is at 54.3—the highest it’s ever been on a 100-point scale—as it moves toward parity with gas-powered vehicles. EV adoption within the J.D. Power EV Index fell to 16.2 in April, hitting its lowest point since August 2021. EV retail share, while having some bright spots when it comes to certain models, is not growing at the same pace as EV availability. This is bringing aggressive conquest sales programs to the EV segment, so we’ll see if shoppers find them attractive enough,” said Krear.
Global Sales
“The global light-vehicle selling rate accelerated in April to 85.9 million units from 84.3 million units in March. After a slower start to 2024, the April year-to-date selling rate has risen to 83.9 million units and is expected to continue to climb as the year progresses and the typical distortions in the first quarter are averaged out,” said vice president of research, automotive at GlobalData.*
“From a volume perspective, April increased 3% year over year to 6.8 million units, slightly weaker than initial expectations for the month, but still a solid performance at the topline. Below the topline, the results were mixed, with Europe outperforming all major markets, increasing 14% year over year. China’s domestic sales increased 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 effect and fewer selling days. Japan’s selling rate recovered as previously suspended production at Toyota and Daihatsu restarted.
“The global selling rate in May is expected to increase significantly to 89 million units on volume growth of 2%. The wildcard this month is expected to be China, which is currently projected to contract 0.4%. If the Chinese market can rebound off recent weakness, global growth will be driven higher. Japan is expected to post a near double-digit increase in May, fueled by stronger mini-vehicle production.
“Given the higher volatility and inconsistent performance across markets, the outlook for 2024 is virtually unchanged at 89.1 million units, a 3% increase from 2023. There is some downward pressure from markets across Asia that could pull the global market down slightly as we progress through 2024. Pricing trends, geopolitical risk and the overall performance of economies around the world continue to be key drivers in the near-term auto market,” said Schuster.
AutoInformed on
*GlobalData
GlobalData says that “4000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.” J.D. Power is also part of GlobalData. Inquiries at: customersuccess.automotive@globaldata.com.