Retail Auto Sales in May Shaping Up To Be Highest So Far in 2015
By Jeff Youngs, May 22, 2015
For the month of May, U.S. new-vehicle retail sales, on a selling-day-adjusted basis, are expected to hit their highest levels since August 2014, according to a monthly sales forecast from J.D. Power and LMC Automotive. The new-vehicle retail seasonally adjusted annualized selling rate (SAAR) in May is expected to be 14.1 million units--slightly above the level reached in May 2014 and the first time the retail SAAR has reached 14.1 million units since August 2014.
According to the forecast for May 2015, new retail car sales are likely to reach 1,300,600 units, an increase of 2% on a selling-day adjusted basis over May 2014. The sales pace of 50,000 units per day in May 2015 is the strongest daily selling rate in the month of May since 2004, when daily sales averaged nearly 53,000 units.
"The industry continues to outperform prior-year levels with respect to retail sales and transaction prices," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The average new-vehicle retail transaction price so far in May is $30,428, on pace to achieve a new record for the month."
The previous May record was set in 2014, when retail transaction prices averaged $29,400.
California Gas Prices, Hybrid Car Sales Sneaking Up
Meanwhile, average gasoline prices across the nation have climbed from January's low of $2.12 per gallon to $2.72 per gallon so far in May, and refinery constraints in California have driven fuel prices in that state up at a much faster rate. Regular unleaded fuel prices in California averaged $3.77 per gallon so far in May--up from $2.55 per gallon in January to their highest level since September 2014. High fuel prices are contributing to increased hybrid and electric vehicle (EV) sales in the state, which have accounted for 9.8% of all retail new-vehicle sales in California in May, their highest level since August 2014.
Nationwide, hybrid and EV sales represent 3.5% of all retail sales in May, up from a low of 2.9% in February. In August 2014, hybrid and EV sales made up 4.3% of nationwide sales and 10.5% of retail sales in California.
Total May Auto Sales Expected to Reach Nearly 1.6 Million
Total U.S. light-vehicle sales for May 2015 are projected to reach 1,591,100--up 3% on a selling-day-adjusted basis compared with May 2014. Fleet volume is expected to hit 290,500 units, accounting for 18.3% of total sales, up from 17.6% a year ago.
LMC Automotive maintains its total light-vehicle sales forecast for the year at 17.0 million units and its retail forecast at 13.9 million units. LMC Automotive's production forecast for 2015 also remains at 17.5 million units--a 500,000-unit increase over 2014.
"May's selling rate is making up for a slightly weaker April, and keeping the year on track to reach the elusive 17 million-unit mark," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Over the next several months, all eyes will be on the timing of the expected increase in interest rates by the Federal Reserve, as the rate increase could have a significant impact on auto sales volume by year-end."