J.D. Power and LMC Automotive’s latest vehicle sales forecast shows a weak sales environment with cars and trucks taking longer to sell and inventories rising. New vehicles took 74 days to sell in May. It was the longest rate for May in a decade. 29% of new cars took at least 3 months to sell.
Thomas King, senior vice president of J.D. Power’s data and analytics division said “For dealers, strength in the used market is offsetting weakness in new. Looking forward, elevated inventory levels remain an issue that will only be corrected through production cuts or higher incentives. As the industry starts its transition to sales of 2020 model-year vehicles, pressure to increase discounts on 2019 model-year vehicles will rise considerably. Manufacturers are responding with larger discounts to take advantage of the Memorial Day weekend which is one of the busiest car-buying periods of the year.”
ALG chief economist Oliver Strauss agreed. “Despite a 50-year low in the unemployment rate and a 15-year high in consumer sentiment, the auto industry continues to face weakening in year-over-year sales.” Read more.
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