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Vehicle Sales up in May

June 5, 2018 0 Comments

May Light Vehicle Sales are up!

An extra selling day in May, as well as the holiday weekend, boosted U.S. light vehicle sales for
the month. The total estimated turnover for May was around 1.6 million, up 4.7 percent from
2017.

Five months into 2018, industry volume is at 7.07 million units, a 1.2 percent increase from the
last year. (As GM won’t report its sales until the end of the quarter, the numbers included are
estimates of the automaker’s deliveries.)

The seasonally adjusted annualized rate hit 16.91 million, the lowest since August 2017 but still
better than May last year.

All three Detroit automakers beat their numbers from last May.

Passenger car sales dropped, making up less than 32 percent of the total sales in May. Buick,
Cadillac, Chevy, Chrysler, Dodge, Ford, and Lincoln sales made up 24.4 percent of the total
passenger car deliveries.

Gasoline prices are rising across the U.S., but they likely won’t hit a threshold high enough to
trigger a mass exodus toward more fuel-efficient vehicles. Consumers can get compact
crossovers and hybrid vehicles with better fuel economy without sacrifice.

Speaking of, crossovers and SUVs made up 46 percent of all sales in May, with total utility
volume up 17.9 percent year-over-year. Year-to-date sales increased 13 percent, and utilities
made up over 57 percent of “people mover” sales (i.e. minivans, cars, MPVs, crossovers, SUVs).
May was a good month for pickups as well, with full-size and mid-size volume up 9.3 and 20.8
percent, respectively. Chevy, Ford, and Ram covered 93 percent of May sales, and their share of
the mid-size market grew to 32.6 percent. The new Ford Ranger mid-size pickup will only grow
Detroit’s piece of the pie.

Outlook wasn’t great for passenger cars; FCA has halted their production in the U.S., and Ford is
dropping sedans from its North American production lineup.

Automakers used to be able to use cars to offset more fuel-heavy vehicle and hit EPA fuel
standards, but now alternative powertrains and other fuel-efficient vehicle have all but eliminated
that need. Additionally, it looks likely the Trump administration will roll back the Obama-era
fuel efficiency guidelines and could stop granting California waivers, leading the U.S. to a single
standard.

It’s not all smooth sailing from here on out; loan amounts and monthly payments rose to record
highs last month, and interest rates are at their highest in several years. However, U.S.
unemployment records falling to low levels could add “upward pressure on wages,” allowing the
new, higher loans to be affordable for more people.

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