May New-Vehicle Forecast Partly Cloudy
Growing inventory, incentives shrink dealer profit, though sales are strong.
Rising retail inventories, up 53% year-over-year, make up the backdrop of the sales picture.
Pexels/Sarmad Mughal
A May new-vehicle sales forecast puts deliveries up about 3% year-over-year when adjusted for fewer selling days to about 1.5 million units, and the seasonally adjusted annualized rate up half a million units to 16.1 million.
The joint J.D. Power-GlobalData forecast predicts retail sales alone will be up more than 4% to about 1.2 million.
Rising retail inventories, up 53% year-over-year, make up the backdrop of the sales picture, setting the stage for increasing discounts throughout the year, according to the forecast.
The conditions have shrunk the average transaction price by 2% year-over-year to just over $45,000, the report indicates, also shrinking retailer profit per unit, which the report puts at $2,471, down about 32%. It says that just about 15% of new models are selling above manufacturer's suggested retail price this month, down from 29% a year ago.
J.D. Power forecasts that a third of new vehicles are selling within 10 days of dealership arrival, down from the pandemic-era peak of 58% in March 2022 for an average of 40 days on the lot before sale.
Originally posted on Auto Dealer Today
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