Market Overview

Fifth Consecutive Month of Slowing Sales Results in Revised Forecast for 2017

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ALG,
the industry benchmark for determining the future resale value of a
vehicle, projects total new vehicle sales, including fleet deliveries,
will reach 1,529,500 units in May, up 0.3 percent from a year ago and
down on a selling day adjusted basis at -3.7 percent.

These figures imply a seasonally adjusted annualized rate (SAAR) of 16.8
million units for May. Excluding fleet sales, U.S. retail deliveries of
new cars and light trucks are expected to be up 0.5 percent with
1,238,141, units and down on a selling adjusted basis at -3.6
percent.

"Based on five consecutive months of year-over-year sales declines, our
revised estimate for full year sales in 2017 is now 17.2 million units,
which still represents a robust and healthy sales environment," said
Eric Lyman, chief industry analyst for ALG.

"Automakers, particularly GM, continue to work through elevated
inventory levels with near record incentive spending. However, on a
month-over-month basis, automaker discounting is down and fleet mix
continues to decline, both signals that the industry is adapting to
lower overall sales volumes," Lyman continued.

Incentive spending is expected to average an estimated $3,435 per
automaker in May, up 9.5 percent from a year ago, and down 0.2 percent
from April 2017.

The
University of Michigan's Index of Consumer Sentiment
is at 97.7 this
month, up from 97.0 in April which indicates continued confidence in the
health of the U.S. economy. Other key factors for positive economic
conditions include the April unemployment
rate
which came in at 4.4 percent combined with a favorable average
gas price of $2.37
recorded for this current week.

Other key findings for May:

  • Registration mix is expected to be 81.0 percent retail sales and 19.0
    percent fleet versus 80.8 percent retail and 19.2 percent fleet last
    May.
  • Total used auto sales, including franchise and independent dealerships
    and private-party transactions, may reach 3,227,957, down -5.4 percent
    from May 2016.

Forecasts for the 12 largest manufacturers by volume:

Total Unit Sales

Manufacturer

         

May 2017

Forecast

     

May 2016

     

% Change vs.

May 2016

     

YoY % Change

(Daily Selling

Rate)

BMW           31,300       33,685       -7.1 %       -10.8 %
Daimler           31,800       32,567       -2.4 %       -6.3 %
FCA           186,000       194,108       -4.2 %       -8.0 %
Ford           235,000       234,748       0.1 %       -3.9 %
GM           250,000       240,450       4.0 %       -0.2 %
Honda           145,000       147,108       -1.4 %       -5.4 %
Hyundai           70,000       71,006       -1.4 %       -5.4 %
Kia           62,000       62,926       -1.5 %       -5.4 %
Nissan           136,000       133,496       1.9 %       -2.2 %
Subaru           52,500       50,083       4.8 %       0.6 %
Toyota           217,000       219,339       -1.1 %       -5.0 %
Volkswagen Group           55,800       52,291       6.7 %       2.4 %

Industry

         

1,529,500

     

1,524,987

     

0.3

%

     

-3.7

%

                           

Total Market Share

Manufacturer          

May 2017

Forecast

          May 2016           April 2017
BMW           2.0 %           2.2 %           1.8 %
Daimler           2.1 %           2.1 %           2.1 %
FCA           12.2 %           12.7 %           12.4 %
Ford           15.4 %           15.4 %           15.0 %
GM           16.3 %           15.8 %           17.1 %
Honda           9.5 %           9.6 %           9.7 %
Hyundai           4.6 %           4.7 %           4.3 %
Kia           4.1 %           4.1 %           3.7 %
Nissan           8.9 %           8.8 %           8.6 %
Subaru           3.4 %           3.3 %           3.7 %
Toyota           14.2 %           14.4 %           14.2 %
Volkswagen Group           3.6 %           3.4 %           3.6 %
                             

Retail Unit Sales

Manufacturer

         

May 2017

Forecast

     

May 2016

     

YoY %

Change

     

YoY %

Change

(Daily Selling

Rate)

BMW           30,320       32,894       -7.8 %       -11.5 %
Daimler           30,100       30,819       -2.3 %       -6.2 %
FCA           145,000       154,915       -6.4 %       -10.1 %
Ford           155,000       153,895       0.7 %       -3.3 %
GM           193,000       183,394       5.2 %      

1.0

%

Honda           143,463       145,573       -1.4 %       -5.4 %
Hyundai           48,985       47,653       2.8 %       -1.3 %
Kia           47,415       46,313       2.4 %       -1.7 %
Nissan           101,000       100,116       0.9 %       -3.2 %
Subaru           47,859       45,314       5.6 %       1.4 %
Toyota           195,178       197,369       -1.1 %       -5.1 %
Volkswagen Group           51,700       47,794       8.2 %       3.8 %

Industry

         

1,238,141

     

1,232,431

     

0.5

%

     

-3.6

%

                           

Incentive Spending

Manufacturer      

Incentive

per Unit

May 2017

Forecast

     

Incentive

per Unit

May 2016

     

Incentive

per Unit

Apr 2017

     

Incentive

per Unit

%

Change

vs. May

2016

     

Incentive

per Unit

%

Change

vs. Apr

2017

     

Total

Spending

May 2017

Forecast

BMW       $ 4,550       $ 5,724       $ 4,424       -20.5 %       2.8 %       $ 141,960,143
Daimler       $ 4,511       $ 4,737       $ 4,557       -4.8 %       -1.0 %       $ 143,434,345
FCA       $ 4,250       $ 4,115       $ 4,359       3.3 %       -2.5 %       $ 781,985,668
Ford       $ 4,090       $ 3,596       $ 4,114       13.7 %       -0.6 %       $ 961,253,655
GM       $ 4,255       $ 4,057       $ 4,238       4.9 %       0.4 %       $ 1,063,836,690
Honda       $ 1,833       $ 1,756       $ 1,809       4.4 %       1.3 %       $ 265,759,279
Hyundai       $ 3,166       $ 2,104       $ 3,135       50.5 %       1.0 %       $ 221,602,176
Kia       $ 3,240       $ 2,734       $ 3,247       18.5 %       -0.2 %       $ 200,891,362
Nissan       $ 3,867       $ 3,242       $ 3,903       19.3 %       -0.9 %       $ 525,958,575
Subaru       $ 969       $ 610       $ 957       58.9 %       1.3 %       $ 50,896,461
Toyota       $ 2,323       $ 2,176       $ 2,346       6.8 %       -1.0 %       $ 504,187,371
Volkswagen Group       $ 4,075       $ 3,605       $ 4,008       13.0 %       1.7 %       $ 226,630,331

Industry

     

$

3,435

     

$

3,138

     

$

3,443

     

9.5

%

     

-0.2

%

     

$

5,231,570,052

                                   

(Note: This forecast is based solely on ALG's analysis of
industry sales trends and conditions and is not a projection of the
company's operations.)

About ALG

Founded in 1964 and headquartered in Santa Monica, California, ALG is an
industry authority on automotive residual value projections in both the
United States and Canada. By analyzing nearly 2,500 vehicle trims each
year to assess residual value, ALG provides auto industry and financial
services clients with market industry insights, residual value
forecasts, consulting and vehicle portfolio management and risk
services. ALG is a wholly-owned subsidiary of TrueCar, Inc., a digital
automotive marketplace that provides comprehensive pricing transparency
about what other people paid for their cars. ALG has been publishing
residual values for all cars, trucks and SUVs in the U.S. for over 50
years and in Canada since 1981.

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