Citi’s Itay Michaeli mentioned that the final May data points “confirm a strong month all-around for pickup trucks—including May used pickup pricing.”
Michaeli maintains a Buy rating on General Motors Company GM, with a price target of $50.
May Data Points
Similar to the April data, the May data supports the analyst’s view that pickups, which are estimated to comprise a majority of the company’s North American profits, represent a “fundamentally different market” to sedans.
New pickup truck sales grew 6 percent year-on-year in May, with midsize growing 15 percent and full-size growing 4 percent, on the whole outperforming the 2 percent gain of the overall industry in the month.
Year-to-date, pickup sales have growth 5 percent, with midsize having increased 14 percent and full size at 4 percent, once again outperforming the overall automobile industry pace of 1 percent growth.
“May’s solid sales pace was again accompanied by higher new truck pricing as pickups experienced low-single digit YoY ATP gains building off mid-single digit gains in Q1,” Michaeli noted.
Manheim Index
Pickup truck prices also gained on the Manheim index, rising 6 percent year-on-year in May, significantly above the overall industry growth of 1 percent and representing the strongest growth among the major auto segments.
“It’s a story about a segment where many had definitively concluded that demand was permanently declining when it fact it was increasing all along. This remains overlooked, in our view,” the analyst added.
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