The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

Cox Automotive Commentary: May 2020 Sales

The Cox Automotive Industry Insights team has been tracking signs of progress and recovery since the global pandemic hit our industry, and May auto sales seem to be another positive step in the path. As Zo Rahim, manager of Economic and Industry Insights notes, "What was becoming evident in late April became clear in May: The automotive retail market is recovering thanks to retail demand that re-emerged after being locked out of the market during the height of the crisis."

Indeed, as Cox Automotive Chief Economist Jonathan Smoke notes in his weekly market update video, the data is showing mixed trends for the industry right now that, at the very minimum, are an indication of a flattening of the recovery we've been witnessing. 

Our Industry Insights team had forecast May sales to come in near 1,050,000 vehicles, a 33% decline from year-ago levels but a healthy gain from April. Initial reports and an analysis of other available data indicate May likely closed higher than forecast, with continued strength in the pickup and SUV segments.

Senior Economist Charlie Chesbrough adds, “Daily sales have been improving since hitting bottom in early April, but we are now questioning if the momentum will continue or has a new, lower plateau been reached. With supply essentially stagnant since early April and production only slowly returning, limited inventory will likely disrupt any sales recovery in the near term.” 

A few data points to explain the current market. 

1) We know the volume of incentive programs were down in May, likely reflective of tightening inventory. 

2) Average transaction prices were up 4% year over year in May, as measured by Kelley Blue Book, reflective of the strong pickup and SUV mix. 

3) While traffic on Cox Automotive vehicle shopping sites and remain strong, new research released today indicates there has been a recent uptick in shoppers expecting to delay their purchase, likely driven by recent civil unrest (Page 5).

As always, if you would like to speak to a Cox Automotive expert or analyst about May auto sale or the market in general, please reach out to the Cox Automotive Public Relations team. We'd be happy to help.

Dealer Sentiment Index Coming Monday: The Cox Automotive Dealer Sentiment Index, a quarterly measure of U.S. dealer sentiment, will be released on Monday, June 8. Data for the Q2 2020 index was gathered in late April and early May and provides insights on how auto dealers viewed the market while near the depth of the crisis. Spoiler alert: It wasn't good. 

Stay safe. Stay healthy. Cheers!