May New Vehicle Sales Expected to be Strong

Small SUVs and crossovers like the 2015 Lincoln MKC are still selling strong in May despite rising gas prices.

Early reports show that May will be a strong month for new car sales, but when the numbers come out they are likely to show sales being down on a year-over-year basis.

According to Kelley Blue Book (KBB), sales are likely to come in at 1.59 million units this month, which will be down 1%. So what’s with all the optimism? There’s one less day this year to sell cars, trucks and SUVs than last May so the seasonally adjusted annual rate (SAAR) is actually higher (17.3 million versus 16.5 million last May) even though fewer vehicles will leave dealer showrooms.

“May sales will reach the highest total year-to-date, and could remain the highest until December of this year,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “While we expect an overall decline in volume versus last year, the difference is the result of one fewer sales day from May 2014, and total SAAR will reflect year-over-year improvement.

“May typically is a strong sales month, as consumers take advantage of warmer weather and advertised deals for the extended Memorial Day sales weekend.”

2015 Chrysler 200S — Despite a slowdown in the sales of small and midsize sedans, Fiat Chrysler is expected to post its 62nd consecutive month of increased sales.

Many analysts expect actual sales in 2015 to hit the 17 million mark, but KBB isn’t quite as enthusiastic, projecting 16.9 million units, which is a 2.5% year-over-year increase and the highest overall total since 2005, when sales fell just shy of 17 million units overall.

(New vehicle sales tracking for 17 million in May. For more, Click Here.)

However, one area where it is still bullish is the trend of consumers buying SUVs. Despite the recent rise in gas prices nationally, the group expects sales of small and midsized utes to rise 6% in May. Conversely, small and mid-size car sales are flat and combined share is down 1.5% and the segments are expected to fall as much as 5% this month.

While most of the automakers are expected to take small sales hits, KBB thinks that Fiat Chrysler is going to keep its run of consecutive months of sales gains intact.

(Click Here for details Honda shifting production from cars to trucks.)

“Fiat Chrysler Automobiles is expected to narrowly continue its sales gain streak to 62 straight months of growth, largely due to the surging Jeep brand, which is poised to set another record in monthly sales,” said Gutierrez.

“The all-new Renegade would have helped push Fiat Chrysler’s total even higher, if not for the halt on its deliveries due to a software issue. Nonetheless, the Cherokee experienced similar troubles at its launch in late 2013 and is now Jeep’s top seller.”

(To see more about how teen drivers pose a risk to everyone on the road, Click Here.)

American Honda could report a slightly larger drop in volume, as two of their best-selling models, the Accord and Civic, are in segments that are losing popularity among consumers, KBB added.