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May Auto Sales Shaping Up to Be Best Yet This Year

May Auto Sales Shaping Up to Be Best Yet This Year

By Jeff Youngs, May 27, 2014
Sales of light vehicles are likely to experience their strongest month of the year (so far) in May, with Memorial Day weekend fueling demand. According to a forecast developed jointly by J.D. Power and LMC Automotive, 1.3 million light vehicles are expected to be sold in the United States at retail in May--an increase of 4% over May 2013. The seasonally adjusted annualized selling rate (SAAR) is expected to be 13.6 million units, up from 12.8 million in May 2013--a significant improvement from the beginning of the year and the highest monthly SAAR recorded so far in 2014.

J.D. Power estimates consumers will spend more than $37 billion on new vehicles this month, surpassing the previous May high of $34.3 billion, set in 2004. May is the eighth consecutive month that consumer spending on new vehicles increased year over year.

"The anticipated strong performance in May reflects the combination of strong underlying demand coupled with a quirk of the industry sales calendar, with the May sales month containing five weekends, compared with just four weekends last May," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The record level of consumer spending reflects a combination of record transaction prices in May--which, at $29,600, are up $800 from the previous May high of $28,795 set in 2013--and the strongest retail sales performance in May since 2004."

Year-over-year fleet sales are expected to decline slightly in May, but total light-vehicle sales will increase by 3% over the same period of 2013, according to the forecast. The forecast for total light-vehicle sales in 2014 is holding steady at 16.1 million units: again, an increase of 3% from 2013.

"Three consecutive months of solid growth has returned the market to the expected trend level on a year-to-date basis," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "As we move toward the second half of the year, the selling rates are expected to continue improving, but the growth rates will begin to flatten out, increasing competitive pressures for all brands."

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