May ushered in more good news for the automotive industry, marking the 10th consecutive month of year-over-year sales increases, according to the NADA Market Beat.
The latest figures reveal a 19.6% spike in new light-duty sales year-over-year. Although the Seasonally Adjusted Annual Rate, or SAAR, dipped slightly from April, the raw volume indicated a positive trend, with sales totaling 1.36 million units, surpassing 2022 numbers by 216 units.
Manufacturers bolstered their efforts to improve vehicle availability, leading to an increase in incentives. According to J.D. Power, average incentive spending per unit reached $1,788, marking an 88% year-over-year surge. Incentive spending varies by OEM and by vehicle segment, in-demand vehicles and popular OEMs having lower incentive spending compared to OEMs and segments with higher inventory levels that offer more attractive incentives to potential buyers.
According to Wards Intelligence, inventory levels of higher-priced pickups and luxury CUVs and SUVs represented 52% of available inventory in May. That mix accounted for nearly 43% of new-vehicle sales and helped keep new-vehicle transaction prices high. According to J.D. Power, average transaction prices in May hit $45,838, an increase of 0.7% year-over-year.
OEMs have increased production of more affordable vehicles, but many of the units are flowing to fleet customers. Wards Intelligence says deliveries to fleet customers in May rose 53% year-over-year and that the fleet mix of new-vehicle sales represented 18% of total new-vehicle sales.
Sustained growth is expected in coming months as new-vehicle affordability continues to improve, reports NADA.
The positive outlook is reinforced by forecasts, which project new light-vehicle sales for the year to reach 14.6 million units. With increased consumer interest, improved inventory levels, and rising incentives, the automotive sector remains on a promising trajectory in the face of evolving market dynamics, NADA’s Market Beat concluded.