May Auto Sales Likely Curbed by Fewer Weekend Shopping Days

Memorial Day promotions and robust truck demand to help month end on upbeat note

SANTA MONICA, Calif.--()--TrueCar, Inc. (NASDAQ: TRUE) projects total new vehicle sales, including fleet deliveries, will reach 1,569,538 units in May, down 4 percent from a year ago, restrained by one less weekend compared with the same month in 2015.

The seasonally adjusted annualized rate (SAAR) for total light vehicle sales in May is an estimated 17.8 million units, up from 17.7 million units a year ago. On a daily selling rate basis, overall sales expanded by 4 percent when adjusting for two fewer sales days versus May 2015. Excluding sales to daily rental, commercial and government fleets, U.S. retail deliveries of new cars and light trucks will likely shrink 4.5 percent to 1,298,681 units.

“Memorial Day weekend kicks off the summer selling season and we see consistent strength in demand, particularly for crossover utility vehicles and pickups,” said Eric Lyman, TrueCar’s vice president of industry insights. “The industry is up against a tough comparison with May 2015 – with five weekends then versus four this year – but that doesn’t diminish the market’s underlying health.”

FCA may report a 1.2 percent increase, the month’s biggest year-over-year sales gain on the continued popularity of its Jeep and Ram light truck lines. Honda, Nissan and Subaru are all projected to be relatively flat, with sales down about 1 percent each. Ford is likely to report a 5 percent drop compared with a year ago, while GM and Toyota may both see declines of 7.9 percent.

In line with the overall market, volume for non-luxury, mass-market brands will likely dip by 4.1 percent versus the year-ago month, and sales of luxury models may also shrink by 3.8 percent.

Incentive spending by automakers averaged an estimated $3,034 per vehicle in May, up 7.1 percent from a year ago, but down 0.4 percent from April 2016.

“Incentives moderated a bit this month while consumers stay focused on higher-margin products,” Lyman said. “Along with this May’s abbreviated selling period, automakers have to adapt to weaker demand for midsize and small cars as relatively cheap gas entices more consumers to upgrade to crossovers and pickups.”

The Federal Open Market Committee left interest rates unchanged last month and overall U.S. economic conditions remain positive. April’s unemployment rate held steady at 5.0 percent, the lowest for the month in eight years, and gasoline prices are still favorable for consumers, falling to a national average of $2.29 per gallon on May 24 from $2.738 a year earlier.

Other key findings for May:

  • Registration mix is expected to be 82.7 percent retail sales and 17.3 percent fleet versus 83.2 percent retail and 16.8 percent fleet last May.
  • Total used auto sales, including franchise and independent dealerships and private-party transactions, may reach 3,181,877 units, up 2 percent from May 2015.

Table 1: Forecasts for the 12 largest manufacturers by volume

Manufacturer  

May 2016
Forecast

    May 2015     Apr 2016    

% Change vs.
May 2015

   

% Change vs. May
2015 (Daily Selling
Rate)

BMW   34,566     36,908     29,826     -6.3%     1.5%
Daimler   31,767     33,187     32,291     -4.3%     3.7%
FCA   206,054     203,568     200,697     1.2%     9.7%
Ford   237,484     250,086     229,739     -5.0%     2.9%
GM   269,868     293,097     259,557     -7.9%     -0.3%
Honda   152,372     154,593     148,829     -1.4%     6.8%
Hyundai   62,978     63,610     62,213     -1.0%     7.3%
Kia   60,935     62,433     56,508     -2.4%     5.7%
Nissan   134,262     134,779     123,861     -0.4%     7.9%
Subaru   48,935     49,561     50,380     -1.3%     7.0%
Toyota   223,500     242,579     211,125     -7.9%     -0.2%
Volkswagen Group   52,594     57,790     50,522     -9.0%     -1.4%
Industry   1,569,538     1,635,090     1,506,977     -4.0%     4.0%
                 

Table 2: Total Market Share

Manufacturer     May 2016 Forecast     May 2015     Apr 2016
BMW     2.2%     2.3%     2.0%
Daimler     2.0%     2.0%     2.1%
FCA     13.1%     12.4%     13.3%
Ford     15.1%     15.3%     15.2%
GM     17.2%     17.9%     17.2%
Honda     9.7%     9.5%     9.9%
Hyundai     4.0%     3.9%     4.1%
Kia     3.9%     3.8%     3.7%
Nissan     8.6%     8.2%     8.2%
Subaru     3.1%     3.0%     3.3%
Toyota     14.2%     14.8%     14.0%
Volkswagen Group     3.4%     3.5%     3.4%
           

Table 3: Retail Unit Sales

Manufacturer  

May 2016
Forecast

    May 2015     Apr 2016    

% Change vs.
May 2015

   

% Change vs.
May 2015
(Daily Selling
Rate)

BMW   33,427     36,157     28,830     -7.6%     0.2%
Daimler   29,714     31,539     30,062     -5.8%     2.1%
FCA   159,922     166,672     154,129     -4.1%     3.9%
Ford   161,484     170,808     152,248     -5.5%     2.4%
GM   214,868     220,231     198,463     -2.4%     5.7%
Honda   150,436     152,334     146,891     -1.2%     7.0%
Hyundai   48,718     52,624     46,861     -7.4%     0.3%
Kia   50,830     50,822     46,628     0.0%     8.3%
Nissan   107,262     113,319     97,390     -5.3%     2.5%
Subaru   45,822     45,874     47,782     -0.1%     8.2%
Toyota   198,823     218,126     186,642     -8.8%     -1.3%
Volkswagen Group   48,853     52,959     46,347     -7.8%     -0.1%
Industry   1,298,681     1,359,948     1,229,881     -4.5%     3.5%
                 

Table 4: Incentive Spending

Manufacturer  

Incentive
per Unit
May 2016
Forecast

   

Incentive
per Unit
May 2015

   

Incentive
per Unit
Apr 2016

   

Incentive
per Unit %
Change vs.
May 2015

   

Incentive
per Unit %
Change vs.
Apr 2016

   

Total
Spending May
2016 Forecast

BMW   $4,978     $4,565     $5,290     9.0%     -5.9%     $171,707,338
Daimler   $4,024     $4,283     $4,000     -6.1%     0.6%     $127,813,358
FCA   $3,926     $3,277     $3,982     19.8%     -1.4%     $804,609,038
Ford   $3,433     $2,674     $3,514     28.4%     -2.3%     $815,320,985
GM   $3,941     $3,766     $4,012     4.7%     -1.8%     $1,063,644,940
Honda   $1,635     $1,939     $1,604     -15.7%     1.9%     $249,064,276
Hyundai   $2,032     $2,330     $2,008     -12.8%     1.2%     $127,940,407
Kia   $2,715     $2,724     $2,722     -0.3%     -0.2%     $165,463,033
Nissan   $3,342     $3,415     $3,232     -2.1%     3.4%     $448,764,037
Subaru   $612     $751     $595     -18.5%     2.8%     $29,939,793
Toyota   $2,029     $2,020     $1,996     0.4%     1.6%     $453,431,066
Volkswagen Group   $3,448     $2,947     $3,443     17.0%     0.1%     $180,283,999
Industry   $3,034     $2,834     $3,047     7.1%     -0.4%     $4,749,550,897

Note: This forecast is based solely on TrueCar’s analysis of industry sales trends and conditions and is not a projection or reflection of the company’s operations.

About TrueCar

TrueCar, Inc. (NASDAQ: TRUE) is a digital automotive marketplace that provides comprehensive pricing transparency about what other people paid for their cars and enables consumers to engage with TrueCar Certified Dealers who are committed to providing a superior purchase experience. TrueCar operates its own branded site and its nationwide network of more than 11,000 Certified Dealers also powers car-buying programs for some of the largest U.S. membership and service organizations, including USAA, AARP, American Express, AAA and Sam's Club. Over one third of all new car buyers engage with the TrueCar network during their purchasing process. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas. For more information, go to www.truecar.com. Follow us on Facebook or Twitter.

TrueCar media line: +1-844-469-8442 (US toll-free) | Email: pressinquiries@truecar.com

Contacts

TrueCar, Inc.
Veronica Cardenas, 424-258-2487
VCardenas@truecar.com
pressinquiries@truecar.com

Contacts

TrueCar, Inc.
Veronica Cardenas, 424-258-2487
VCardenas@truecar.com
pressinquiries@truecar.com