US light vehicle market down 29% in May

Disruptions continued to disrupt the US auto market in May, with US light vehicle sales falling 29% from last year and falling to their levels in May 2020.

According to LMC Automotive, a leading automotive forecasting and market intelligence company, now part of GlobalData, May volume totaled 1.11 million units, a 29% year-over-year decline. Annual sales (SAAR) decreased by nearly 2 million units to 12.7 million units, from 14.5 million in April.

May lost two sales days this year and adjusted for this difference, sales were still down 14% year-over-year. However, the number of vehicles sold per day of sale fell to 51,900 units from 60,400 units a year ago.

LMC said that with prices remaining at record highs and monthly payments increasing as interest rates rise, retail sales are starting to show weakness.

Retail sales fell to just over 945,000 units, a 32% year-over-year decline. Fleet sales were also lower in the annual comparison; however, they accounted for 14.9% of total sales, up from 11.6% a year ago.

While still higher than in January and February, weak May results reduced total sales in the first five months of the year to 5.65 million units, down 19% year-on-year. Sales so far in May are well below nearly 7 million units last year, but remain above 2020 at just 340,000 units.

Augusto Amorim, Senior Manager, Americas Vehicle Sales Forecasts, LMC Automotive, said: “We saw sales really deteriorate in May, but again, the impact was uneven across the sector. Imported vehicle sales – especially those built in Asia – fell. by 44% year-on-year, while that of domestic models fell by 24%, illustrating the additional logistical delays.

“Once again, thanks to Tesla’s strong performance and the arrival of new products, Premium outperformed the industry as a whole and Premium share grew to 16.1%, a record for the month of May.

“General Motors once again led the market, but Toyota is getting closer. The difference between the two groups was only 5,000 units, up from 16,000 in April. Of the major OEMs, Ford has outperformed, but mostly because of the weak May 2021 results. That said, Ford is lagging behind its competitors in sales rankings. The Chevrolet Silverado was the best-selling model for the second consecutive month, and the Toyota brand was more than 12,000 units ahead of Ford. Through May, Toyota leads Ford with more than 65,000 units.”

Press Outlook

The US sales rate for May YTD was only 13.9 million units, putting more pressure on the 2022 outlook. Since supply constraints will not significantly ease this year, a pronounced increase in sales percentage through the remainder of 2022 is now less likely, LMC said. As a result, it has lowered the 2022 forecast for light vehicle sales in the US to 15.0 million units, just 60,000 units more than in 2021.

North American production volume was slightly better than expected in April, but LMC cut about 50,000 units from the second quarter, contributing to the decision to cut demand.

The interruption in North American production is expected to total 1.4 million units by 2022, delaying inventory recovery until the end of 2023. In addition, consumers continue to struggle with car price inflation. The combination of negative variables has led LMC to lower its 2023 US sales forecast by 450,000 units to 16.1 million units, a 7% increase from 2022.

Jeff Schuster, President, Americas Operations and Global Vehicle Forecasts, LMC Automotive said the outlook has turned negative again.

“Headwinds continue to pile up against continued market recovery and stability in vehicle offerings,” he said. “We expect the economy and the auto market to continue to be plagued by volatility for the foreseeable future. Given the increased risk, it is likely that 2022 will turn negative from 2021, with a volume of up to 14.7 million units. The auto industry will have to continue to manage lean inventory and an increasing likelihood of a recession in 2023, so the near-term outlook has again tilted negatively.”

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