Cox Automotive Forecast: Despite Higher Incentives and Improved Inventory, New-Vehicle Sales Growth Remains Modest in May

Updated, June 4, 2024 – The new-vehicle sales pace in May surprised to the upside, as higher inventory levels and more aggressive deal-making helped push the May sales pace slightly higher than the Cox Automotive forecast of 15.8 million. Our team was expecting a positive result in May, a gain compared to April and higher year over year, as inventory levels at the start of May were relatively robust and price pressure has resulted in better deals for consumers. Initial estimates suggest the sales pace in May was closer to 15.9 million.

The volume gain last month, forecast earlier at an increase of 3.5%, also came in marginally higher. The final numbers will be tallied by the end of the week. But sales numbers from Toyota – with electrified vehicles accounting for nearly 40% of total sales, according to company reports – were very strong, and many major Asian nameplates posted solid results above the Cox Automotive forecast, including Hyundai, Kia, Mazda and Subaru. Other makers likely gained as well, and results suggest retail sales outperformed fleet.

The strong May sales are a good sign for industry momentum heading into the summer. May is typically a good month for sales volume, and May 2024 did not disappoint, with good volume and the best sales pace so far in 2024 despite stubbornly high auto loan rates. The Cox Automotive full-year forecast for 2024 stands at 15.7 million and will be reviewed at the end of June. (Sign up for the Mid-Year Review on June 25 to hear the details). The broader market has been showing signs of slowing as consumers throttle back on spending, but the new-vehicle market continues to hold up well. Profitability is being squeezed, but sales volume continues to grow, keeping 2024 on track to be the best year for new-vehicles sales since 2019.

ATLANTA, May 23, 2024 – Cox Automotive forecasts that May’s new-vehicle sales will show improvement over last year, driven by significantly increased inventory levels leading to more appealing incentives. However, vehicle affordability issues, driven partly by high interest rates and elevated new-vehicle prices, continue to weigh negatively on sales, as typical monthly payments for new-vehicle loans are above $750.

The new-vehicle SAAR, or annual sales pace, in May is forecast up from last May’s 15.5 million level and a modest uptick from last month’s 15.7 million pace. Sales volume is expected to rise 3.5% over last year and 6.4% above last month. There are 26 selling days this May, one more than last year and last month.

At the start of May, new-vehicle inventory was at 2.84 million units, 51% above year-ago levels and the highest point since late 2020. But prices have barely budged compared to the same time in 2023. Meanwhile, incentives are running nearly twice the level seen a year ago.

Cox Automotive Senior Economist Charlie Chesbrough said: “Sales in May generally improve over April as nicer weather brings more shoppers out to dealer lots. Memorial Day weekend often sees many low-price promotions from manufacturers as they try to build strong sales momentum for the summer season. With high inventory levels for several brands, we expect shoppers to see many aggressive offers this year.”

May 2024 New-Vehicle Sales Forecast

All percentages are based on raw volume, not daily selling rate.

About Cox Automotive
Cox Automotive is the world’s largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, auto manufacturers, dealers, lenders and fleets. The company has 29,000+ employees on five continents and a portfolio of industry-leading brands that include Autotrader®, Kelley Blue Book®, Manheim®, vAuto®, Dealertrack®, NextGear Capital™, CentralDispatch® and FleetNet America®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately owned, Atlanta-based company with $22 billion in annual revenue. Visit coxautoinc.com or connect via @CoxAutomotive on X, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn.

Media Contacts:
Mark Schirmer
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mark.schirmer@coxautoinc.com

Dara Hailes
470 658 0656
dara.hailes@coxautoinc.com