Analysts Predict Slow New-Vehicle Sales for May
The official numbers won't be out until early June, but J.D. Power and Associates and LMC Automotive are already predicting that May will be another down month for new-vehicle sales. In fact, they are predicting this will be the slowest May since 2013, even with Memorial Day — one of the largest car-shopping weekends of the year — still to come.
J.D. Power and LMC are predicting a monthly sales figure of 1,222,000 units in May, which would represent a 2.9 percent decrease in the selling-day-adjusted basis compared to May 2016. This slowdown is happening even though manufacturers bumped up incentives early in the month to nearly 10 percent of MSRP. As such, their yearly forecast for 2017 is down to 16.9 million units versus 17.3 million units that were sold in 2016.
"On the surface, continued downward pressure on auto sales since the beginning of the year is troubling," Jeff Schuster, senior vice president of forecasting at LMC, said in a statement. "However, we believe some of the weakness year-to-date has been exaggerated by jitters over policy risk with the Trump administration. If uncertainty dissipates and tax cuts are initiated — or original equipment manufacturers engage higher incentives — stronger demand could return for an encore performance in the second half of the year."
Trucks continue to hold strong, accounting for 61.7 percent of new-vehicle sales so far in May. That makes it the 11th consecutive month that trucks have accounted for more than 60 percent of the market.
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Comments
The numbnuts at the Federal Reserve have thrown cold water on 2017, beginning with all of their talk about rising interest rates.
They were perfectly able to calm themselves when the last president was in the White House for 8 bleeping years, but no sooner do we get a new guy in the job and they're duming the cold water on his plans for the economy.
So for folks who want to buy a $40-50 thousand dollar pickup, the prospects are less attractive until later in the summer, early fall even. Either that, or you have to consider a 3 year lease instead of traditional financing.
Another part of the problem is that Detroit began pushing small cars and hybrids 8 years ago in the face of a weak economy and concerns about gas prices and global warming.
Since that time gas prices have been cut in half, with a key result being the increased popularity of big SUVs and half ton pickups. Pickups and SUVs had great years in 2014, 2015 and 2016, but small cars continue to lose in the marketplace.
Millenials are also still living in the basement at mom's house so the ability of college students who are, ahem, extending their studies to include year five and year six, don't have the dough for buying new cars/trucks.
@papajim
The millenials are further enabled by the ability to stay on daddy's insurance until the time I was married with 3 kids.
The used car/truck lots are full of 2012-14 vehicles that have just come off leases. You can get them pretty cheap right now. If the car manufactures would not jack up the prices, they could sell more vehicles with out incentives. right now, you can get a 4x4 truck for $10-12K off the sticker with out even being hasselled. The sticker should always be that price.
The sticker should always be that price.
@Dave
Try telling that to the new-car dealers. Back in the 1980s a few companies were actually trying it. It was a fad.
The pricing is the way the dealers like it.
The pricing of new vehicles doesn't scare me. I sit on my butt at home and email them and tell them what I'll pay and if they accept, fine. If not, fine too. Gone are the days I'll sit in some dealership for 4-6 hours sending the salesman back and forth to "his manager". I play ball my way now. They can either sell me a vehicle on my terms or they won't. Their choice.
Yea, I tell the dealer what I'll pay usually 12-14K under sticker unless its a brand new model. They can take it or leave it. Most dealers around here want to move cars and trucks.
@Robert. Same here dude. I ordered my 2011 truck and got 24.5% off the sticker. Has to be at least 20% off before I even get out of the chair. I'm patient and always win.
Ford is strapped for new products right now. they spent all their time and money of the aluminum F-150, they only have a couple new vehicles coming out in the next couple years. GM has triple the number of updated and new vehicles in the next 2 years.
@Papa Jim
No slow down in sales in Australia.Many new models coming including the new Ranger and Mercedes Pickup
@Dave - " Between 2018 and 2021, 85 percent of Toyota vehicles will be refreshed or new, just one percent ahead of GM’s product turnover. Ford follows the pair with an 83-percent replacement rate, but its big ticket products won’t appear until after the 2018 model year. Among them, the upcoming Ranger midsize pickup and Bronco SUV deserve top billing."
GM's replacement rate is 84%. One percent more than Ford's 83%.
That isn't triple.
No slow down in sales in Australia.Many new models coming including the new Ranger and Mercedes Pickup
Posted by: Robert Ryan | May 27, 2017
@Robert R
You knew I would not let that stand! Australia's GDP peaked in 2012. Been on a slide since then. I'd call that a slow down.
https://tradingeconomics.com/australia/gdp
Why not deal in facts, Robert?
I just bought my 15 Prospector Power Wagon. I won't be needing a truck for a while if ever. I will be buying a 2500 work van soon. Looking at Nissan NV 2500.
Lou, I get my facts from the newspaper, they list the American companies scheduled new and refreshed vehicles in the next 4 years. They, like me, do not care what happens to the companies that brought us Pearl Harbor.
I have no idea where you get percentages, I searched the internet and do not see them...
@Lou, I'm taking sides with Dave on this.
Ford invested heavily in alternative strategies during the last ten years, with a special focus on smaller and more sophisticated coupes, sedans, electric cars and hybrids.
They made investments in their truck line too, but they dropped the Ranger for North American markets, anyway, and they emphasized "green" thinking with the F150---focusing on lighter components and smaller powerplants (V6 instead of V8).
If gas prices had doubled between 2010 and 2016, their approach might have been a big success. If the US economy had not languished during that time, their efforts might have been rewarded by a vigorous market for new ideas.
Instead, gas prices fell and SUVs and big pickups prevailed. RAM and GM thrived in that environment, despite having ignored much of the hi-tech investment that Ford made in new ideas.
Ford recently fired Mark Fields their CEO. He's in line for a 50 million dollar settlement.
Their profitability has been rather good, but the stock market has yawned in much the same way that consumers did during the last 8 years. Expect to see more shakeups at Ford in the coming year.
I'm siding with Lou on this one.
Ford outsells Silverado, Sierra, Colorado and Canyon COMBINED even without the Ranger.
Ford went to turbos and aluminum first on the F-150. Chevy will follow suit in January.
GM sales are down despite huge incentives. GM didn't even mention the Silverado in the year end press release. They need some aluminum and turbo refreshing.
Also Ram is outselling Chevy Silverado now. Explain that one to me.
Dave Z
Also Ram is outselling Chevy Silverado now. Explain that one to me.
I my area its price...they are cheaper...plus ride in one and it rides like a car.....actually nice...great for driving around town,,,soccer mom truck...don't haul much of a load. One was in front of me for some garden soil...only could take half a bucket...tires were ballooned out and sagged pretty bad....I took the full bucket in my chev, Price and they ride nice...make a great get around town car or take 2 garbage cans to the dump.
It's always the "price" excuse when I show GM getting outsold.
Here's the truth.
"GM is spending 26 percent more in discounts on each Silverado truck than Fiat Chrysler does for its Ram and 85 percent more than Ford does on its on F series, according to the Power Information Network data"
smh.
GM vehicles across the board are way overpriced and lack some of the features being offered by their competitors. You can't get any sort of driver assistance tech on a Canyon Denali and they expect you to pay mid-40's for that truck?? Don't think so, GM. GM trucks and cars are not a good value at all.
GM outsold Ford by over 100k units last year in pickups.
GM outsold RAM by 2 to 1 in 2016.
While GM solidly beat Wall Street expectations, Ford just fired the CEO.
Regarding profits, GM said the average transaction price (ATP) for its vehicles rose a full $740 from November to $36,386 in December 2016. Their ATPs were the best of the Big 3
GM chose a successful strategy of raising the ATP at a time when RAM and Ford were aiming at the fleet markets. RAM's parent company is a basket case.
Happy memorial day!
One other reason for an overall slow down on truck sales is that GM and Ford both have at least refreshed or complete model changes coming up in the next year or two. Ford also has engine and transmission changes with their new diesel coming and adding the 10 speed to the 5.0l. There's been sightings of a new Silverado/Sierra that's coming soon. To me the majority of potential truck buyers are opting to wait for new line ups.
Uh oh... sales dip... good thing the big 3 minus 1 put their money into making world class small and midsized cars sold at a profit to get them through times when bigger more expensive things don't sell. O that's right it easier (at least for 2 of the 3-1) to ask for a bailout instead. But they all keep lying that they've learned their lesson. Hopefully capitalism will eventually sort it out.
papajim,
Just did a quick search on the net regarding Australia's economy.
Since 2012 GDP has been increasing at a tad under 3% per year.
Then I looked at our GDP (US) rate of increase. Guess what? The Australian economy has outstripped the US economy in GDP growth.
The area of your dicussion on economics is, as usual out of your expertise.
You make many uneducated comments, ranging from pickups to economics.
Why don't you learn from people who have superior knowledge and insight on the basics of life.
@BAFO, Big Al, Wild Willy
instead of a quick search, why not just deal in the facts?
https://tradingeconomics.com/australia/gdp
good thing the big 3 minus 1 put their money into making world class small and midsized cars sold at a profit to get them through times when bigger more expensive things don't sell
@clint
Which alternative universe are you referring to?
During the last three years, the sale of small & midsize cars was a drag on the big 3. They were getting killed by the Koreans on that markert. It was the sale of big SUVs and pickups that carried the day for Detroit, especially in 2015 and 2016, despite the fact that Ford fell on its face.
papajim,
US Dollars?
Hmmmm....again you display your lack of knowledge.
I think Australia has its own currency and they don't use USD. Imight be wrong, but I just read there is the Australian dollar.
I think if I owned a store here in the US and an Australian tried to pay me in AUD I roll over and have a chuckle.
This would be no different if one of us went over to Australia and tried to buy a Coke in USD.
I really thought you knew most countries have their own currency and their economic growth is measured in their currency. Not USD.
I'll call you Forrest from now on.
Again, who is this Big Al guy? I haven't heard of him before. Is he your jilted lover? This would fit perfectly with your personality type.
@Big Al, Wild Willy, BAFO
The US dollar is the worlds "reserve" currency. Nothing else needs to be said on that. Period.
Australia's GDP has been in a sharp decline since 2012. Use whichever yardstick you like, but that's the fact Jack.
As we have discussed previously, your anti-depressant. You need to consult with a medical professional before changing your dosage.
The general results with these products is very good for about 90 percent of adults who take the meds, but strict adherance to dosage is required. Hospitalization may be required for someone who changes the dose (or stops taking) their meds. This means you!
Nothing BIG AL AKA WILLY posts can be believed.......it is all produced through the left wing/ Progressive/Communist lens.
I expect to see Ram stay in third as chevy continues to slide.
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