Cox Automotive experts comment on May sales
Likelihood of another 17 million year grows
Monday June 4, 2018
Article Highlights
- Cox Automotive said it could make an upward revision to its 16.7 million forecast at the end of the second quarter. Automakers sold 17.2 million new cars and trucks in 2017, which was the third year in a row topping 17 million.
- "It's sort of like we're getting the best of both worlds: strong economic activity without the inflation we were worrying about," Charlie Chesbrough, senior economist for Cox Automotive, said on a call with reporters. "Right now, the economy seems to be in a very strong sweet spot. That little additional money is having a positive impact on [consumers'] wallets and their confidence."
- "Despite rising transaction prices and higher fuel costs, the new-vehicle market remains strong. Consumers continue to buy trucks and SUVs at an accelerated pace, more than offsetting the ongoing drop in car sales," said Karl Brauer, executive publisher for Autotrader and Kelley Blue Book. "Economic indicators suggest we'll see this trend throughout the summer and fall, though talk of tariffs and the specter of $4-plus-a-gallon fuel could end the party, and inventory levels remain relatively high at several automakers."
U.S. light-vehicle sales are still expected to decline for a second consecutive year in 2018, but implacable demand for high-profit SUVs and the extra cash that last year’s income-tax changes put in some customers’ pockets are helping to soften the fall.
Auto sales came in stronger than expected in May, rising 4.7 percent from a year ago to 1.59 million, according to the Automotive News Data Center. It was the third consecutive year-over-year gain for the industry’s seasonally adjusted, annualized selling rate, though the 16.91 million rate for May also was the industry’s lowest SAAR since August.
Analyst forecasts were increasingly optimistic based on how the year has progressed. LMC Automotive last week raised its 2018 outlook to 17.1 million vehicles from 17 million. Cox Automotive said it could make an upward revision to its 16.7 million forecast at the end of the second quarter. Automakers sold 17.2 million new cars and trucks in 2017, which was the third year in a row topping 17 million.