Auto Sales Slow Down in May, Reflecting Cooler Economy

Strategic Insights -

Auto sales in the United States experienced a moderate 3 percent growth in May, following a strong period in the early spring. This slowdown can be attributed to both factory production constraints and a general cooling in the economy. Sales of domestic and imported cars edged up 4 tenths of 1 percent to 820,331, while sales of all light trucks grew 7.2 percent to 539,889.

Key Takeaways:

  • The slowdown in auto sales was attributed to factory production constraints, particularly for popular sport utility vehicles, as well as a general cooling in the economy.
  • Sales of all light trucks continued strong, with General Motors and Chrysler posting their best May light-truck sales ever, while Ford sold more trucks than in any previous month.
  • Luxury-car sales continued to lag behind the market, with Toyota's Lexus division plunging 25 percent and General Motors' Cadillac division falling 17.1 percent.
  • BMW and Mercedes scored strong sales gains during May.
  • Some auto dealers attributed the slowdown to rising interest rates and uncertainty in the stock market, while others reported a lack of inventory as the primary challenge.
  • Truck sales provided a bright spot for companies with a particularly grim month, with Toyota's relatively low-volume sport utility vehicles climbing 42.2 percent.

Statistics:

  • 3 percent: Moderate growth in auto sales in May.
  • 820,331: Total sales of domestic and imported cars.
  • 539,889: Total sales of all light trucks.
  • 7.2 percent: Growth in sales of all light trucks.
  • 7 million units: Seasonally adjusted selling rate for domestically built cars.
  • 6.9 million units: Seasonally adjusted selling rate for domestically built cars a year ago.
  • 7.4 million units: Seasonally adjusted selling rate for domestically built cars in April.

Sources:

  • Jason Bram, economist with the Conference Board in New York City.
  • Phil Herron, new-car sales manager at Torrington Ford-Lincoln-Mercury in Torrington, Conn.
  • David Jimenez, general sales manager of Chris Auffenburg Chevrolet in St. Louis.
  • J. Michael Losh, vice president in charge of G.M.'s North American vehicles sales, service and marketing.
  • Company reports; Department of Commerce (pg. 47)