![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2018\/02\/Woman-buys-car-1024x703.jpg\")
The seasonally adjusted annualized rate for total light vehicle sales is an estimated 16.2 million, bouncing back from 12.1 million SAAR in May 2020, TrueCar reported. Cox Automotive estimated sales are expected to finish at a seasonally adjusted annual rate of 16.5 million, with sales volume at 1.54 million. <\/p>\n\n\n\n
“May of last year was heavily impacted by the pandemic and doesn’t provide a great compare. However, compared to May 2019 we expect retail sales to be up 9%. The global microchip shortage is putting pressure on the industry, but we are seeing overwhelming demand continue to support historically strong retail sales,” said Nick Woolard, Lead Industry analyst at TrueCar. <\/p>\n\n\n\n
Vehicle supplies dropping<\/h2>\n\n\n\n
“Vehicles are turning quickly, almost four weeks faster than what we saw during this period in 2019. It is a seller’s market and consumers who find a vehicle they like will need to move quickly or risk losing out,” added Woolard. <\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2020\/12\/Ford-Kansas-City-plant-truck-production-1024x682.jpg\")
“May kicks off the summer sales period and this month we expect average incentive spend to be below $3,000. This is down nearly 30% from last year with all major manufacturers showing declines,” said Valeri Tompkins, senior vice president of OEM Solutions at TrueCar. <\/p>\n\n\n\n
“With continued constraint on vehicle production, we expect incentives to remain low, at least throughout the summer.” <\/p>\n\n\n\n
Declining inventories slowing sales<\/h2>\n\n\n\n
Charlie Chesbrough, Cox Automotive senior economist, noted the first four months of 2021 have delivered a surprisingly strong light-vehicle market, with a sales pace close to 17.3 million through April. May is likely to show a slowing market. <\/p>\n\n\n\n
\u201cSupply is more than 40% below last year\u2019s levels, and many dealers have little inventory available,\u201d Chesbrough said. \u201cMemorial Day weekend is historically one of the biggest selling periods of the year. What\u2019s historic now is the exceptionally low inventory.\u201d<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedetroitbureau.com\/wp-content\/uploads\/2019\/08\/dealer-inventory-on-lot-1024x575.jpg\")
Cox said supply shortage means buyers will likely pay more, as well, if they find a suitable vehicle. Transaction prices are high due in large part to a more expensive product mix of tech-heavy crossovers and SUVs. Sales incentives are also low \u2014 and dropping \u2014 in 2021. <\/p>\n\n\n\n
Down, down, down<\/h2>\n\n\n\n
In April, the average incentive as a percent of average transaction price was 7.9%, according to an estimate by Cox Automotive\u2019s Kelley Blue Book. In 2019, the average incentive was 11.1% of ATP and incentives averaged 11.3% of ATP in 2020. Overall incentive spend is down 29% from 2020. <\/p>\n\n\n\n
Given the low supply and strong demand in the market today, buyers will find fewer \u201cgood deals\u201d this Memorial Day weekend, Cox added. <\/p>\n\n\n\n
The average interest rate on new vehicles is 4.6% and the average interest rate on used vehicles is 7.6%. The average loan term on a new vehicle for April 2021 is 70 months and the average loan term on a used vehicle is 69 months. Fleet sales for May 2021 are expected to be up 47% from a year ago and down 18% from April 2021 when adjusted for the same number of selling days Used vehicle sales for May 2021 are expected to reach 4 million, up 13% from a year ago and up 4% from April 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sales of new vehicles in May are robust but are being held back by the declining inventories on dealer lots. The ongoing semiconductor crisis is only going to further constrict the vehicles available on dealer lots, TheDetroitBureau.<\/p>\n","protected":false},"author":20009,"featured_media":53683,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5],"tags":[790,787,788,789,428,344],"make":[],"post-state":[335],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/202863"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/20009"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=202863"}],"version-history":[{"count":4,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/202863\/revisions"}],"predecessor-version":[{"id":202867,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/202863\/revisions\/202867"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/53683"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=202863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=202863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=202863"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=202863"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=202863"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=202863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}