May automobiles sales are being reported by some automakers and early indications are results will be near the Cox Automotive forecast released last week. Our forecast called for year-over-year volume growth of near 40%, with market volume near 2019 levels. With the pandemic in the U.S. shifting to the rearview mirror, demand for new vehicles is BTN – Back to Normal.
Inventory, however, continues to hold back the market. A Cox Automotive analysis of vAuto Available Inventory data indicated there were roughly 2.24 million new-vehicle available in early May, a 44 days’ supply. Inventory dropped throughout the month and will begin June at new lows. Still, some brands, including Honda and Hyundai, are reporting record sales in May.
Charlie Chesbrough, senior economist at Cox Automotive notes, “May sales are likely to show great variation across brands, as the supply situation is impacting some nameplates and brands more than others. In addition, comparisons to last year are difficult and misleading in determining relative performance this year. The East and West Coast markets were hit especially hard with COVID-19 lockdowns last April and May, and some brands were impacted more than others. Regardless of the variation, we see two trends emerging from the May numbers: First, the market is slowing from April’s fast pace. Second, thus far, select brands, notably Toyota and Kia, are demonstrating an ability to maintain sales despite extremely low inventory.”
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