Global Light Vehicle Sales

In May, the Global Light Vehicle (LV) selling rate registered 88 million units per year – a 1% improvement year-over-year and 3.4% increase year-to-date.

“Given the higher volatility and inconsistent performance across markets, the outlook for 2024 is virtually unchanged at 89.1 million units, a 3% increase from 2023. There is some downward pressure from markets across Asia that could pull the global market down slightly as we progress through 2024. Pricing trends, geopolitical risk and the overall performance of economies around the world continue to be key drivers in the near-term auto market,” says Jeff Schuster, vice president of research and automotive at GlobalData.

Caption: Market Lines is now excluding exports from the China sales total. The adjustment has been backdated to 2018.

U.S. New Vehicle Sales

Total new-vehicle sales for May 2024, including retail and non-retail transactions, are projected to reach 1,446,800 units – a 2.9% year-over-year increase on a selling day adjusted basis, according to a joint forecast from J.D. Power and GlobalData.

“Expected new vehicle sales results for May represent a mixed bag of outcomes. On the positive side, the total sales pace will exceed 16 million units for the first time this year. Also, discounts are similar to last month, despite May being a month in which discounts traditionally increase to take advantage of elevated shopping activity during the Memorial Day weekend. This is good news for manufacturer and retailer profitability,” says Thomas King, president of the data and analytics division at J.D. Power.

“However, the industry continues to produce more vehicles than are being sold, leading to rising inventories and increasing the likelihood of elevated discounts as the year progresses,” he continues.

Important Takeaways, Courtesy of J.D. Power:

Retail buyers are on pace to spend $50.9 billion on new vehicles, up $3.3 billion year-over-year.
Trucks/SUVs are expected to account for 80.6% of new vehicle retail sales in May.
The average new vehicle retail transaction price is expected to reach $45,033, down $1,045 year-over-year.
Average incentive spending per unit is expected to reach $2,640, up from $1,782 in May 2023.
Average interest rates for new-vehicle loans are expected to hit 7%, 20 basis points higher than a year ago.
Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is expected to be $2,471 – down 31.5% year-over-year.
Fleet sales are on pace to total 259,723 units in May, down 3.4% year-over-year on a selling day adjusted basis.

Review a comprehensive 2024 forecast, courtesy of Cox Automotive.

U.S. Used Market

Wholesale used-vehicle prices (on a mix-, mileage- and seasonally-adjusted basis) decreased 0.3% during the first 15 days of June. The mid-month Manheim Used Vehicle Value Index dropped to 196.8, down 8.5% from the full month of June 2023.

“May ended with stronger than normal price declines in the last few weeks, and that’s continued into early June,” says Jeremy Robb, senior director of economic and insights at Cox Automotive. “We are still seeing higher sales conversion levels with days’ supply down as sales have continued to run above last year’s levels.”

According to Manheim, all major market segments posted seasonally-adjusted prices that remained lower year-over-year in the first half of June. The industry’s year-over-year decline stands at 8.5%. In comparison, the pickup segment was the only group to outperform the index overall, decreasing by 7.5%. SUVs, luxury, mid-size cars and compacts fell 9.2%, 10%, 10.1% and 11.2% year-over-year, respectively. Electric vehicles were down 17% year-over-year. While the overall industry dipped 0.3% month-over-month, SUVs, as well as compact and mid-size cars, increased 0.5%, 0.4% and 0.2%, respectively. Non-EVs increased 0.4% in the first half of June, while EVs were down 7.1% month-over-month.

KPI – June 2024: State of Business

By Pat Curtin