May Sales to Continue Upward Trend

A new WardsAuto forecast calls for U.S. light-vehicle deliveries to best April’s strong showing, with modest increases to incentives and a full post-holiday sales week on the calendar boosting the retail outlook.

The report calls for a May daily sales rate of 57,249 units (over 27 days), a 3.5% improvement over same-month year-ago (26 days) – equating to 1.55 million deliveries.

The projected 16.1 million-unit seasonally adjusted annual rate would be slightly higher than April’s SAAR, which rounded up to 16 million, but shy of March’s 7-year high 16.3 million.

The forecast SAAR also would bring the rolling 3-month SAAR above 16 million units for the first time since the fall of 2007, and keep YTD sales in line with WardsAuto’s full-year 2014 forecast of 16.2 million units.

Projected sales would represent a 7.7% gain in DSR over prior month, directly in line with the 7-year average April-May change in daily performance.

The forecast was influenced in part by continued improvement in the employment situation, with the Bureau of Labor Statistics reporting 288,000 new jobs to April, dropping the unemployment rate to a 5 1/2-year low 6.3%.

Consumer confidence and expectations remain high, with the Thomson Reuters/University of Michigan Surveys of Consumers reporting its Consumer Confidence rising to within a point of its post-recession high.

The industry’s 69-days’ supply at the end of April also should play a positive role in moving sales, with forecast inventory dropping to a healthier 61 days’ supply by the end of May.

Auto makers not only will have an extra sales day this month, they should see a decided benefit from the fact that five selling days fall after the Memorial Day weekend, including a Saturday, (compared with four weekdays last year.)

The WardsAuto report calls for Detroit Three daily sales to climb 3% over year ago, accounting for 45.7% of industry LV volume.

General Motors’ forecast 280,000 deliveries represents a 6.6% increase in DSR over year-ago, resulting in a projected 18.1% market share. Ford is expected to finish 5.4% below year-ago on a daily basis, based on 237,000 light-vehicle deliveries, for a 15.3% share.
Chrysler’s projected 10.4% DSR increase and 190,000 deliveries equate to an expected 12.3% market share.

Asian automakers should combine for a 3.8% improvement over year-ago, with sales topping 700,000 LVs.

WardsAuto’s report calls for Toyota to achieve a 14.3% share of the market with 220,000 deliveries, reflecting a 2.2% improvement in daily sales. Honda’s DSR, meanwhile, is projected to fall slightly below year-ago, with an expected 145,000 deliveries for the month giving the auto maker a 9.4% share.

Nissan daily sales should rise 8.2% vs. year-ago, placing the automaker in a dead heat with Hyundai-Kia (+2.3%), with both projected to take 8.3% of the market on roughly 128,000 deliveries each.

European automakers should again lead all regions in year-over-year growth, with daily sales rising 4.3% on 135,000 deliveries. The Volkswagen brand is the group’s projected volume leader, with 37,000 forecast deliveries equating to a 2.4% share, followed by BMW and its Mini brand, projected at 33,200 sales and a 2.1% share.

At forecast levels, year-to-date sales through May would rise to 6.66 million units, up 4% over the first five month of 2013.

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