Cox Automotive Predicts Drop in May New-Vehicle Sales After Tariff Surge
Analyzing the Slump: May New-Vehicle Sales Forecasted by Cox Automotive
Cox Automotive released its latest forecast suggesting that new-vehicle sales are poised for a cooling off period following a surge triggered by tariff concerns. The forecast estimates a seasonally adjusted annual rate (SAAR) of approximately 16 million for May 2025, indicating a slight increase from last year but a marked decline from the impressive sales figures in March and April.
The volume for May is projected to reach around 1.5 million units, reflecting a 3.2% increase compared to the same period last year and a 2.5% rise from the previous month, April. While this data seems positive at first glance, it is primarily influenced by the increased number of selling days this May compared to last year and the prior month.
According to Charlie Chesbrough, a senior economist at Cox Automotive, the vehicle market experienced a significant boost after the tariff announcements in March. Many consumers decided to expedite their vehicle purchases, anticipating higher prices in the near future. However, as this surge in demand has now been largely met, the forecast indicates a decline in consumer demand for the upcoming months.
The report underscores how the strong sales performance in both March and April resulted in diminished inventory levels, reaching 2.49 million units at the beginning of May. This represents a 7.4% decrease from April and a considerable 10.5% decline year-over-year. Such reduced supply inevitably affects a consumer's ability to find suitable vehicles, aligning with the tightened market conditions.
Future Insights on Inventory and Pricing
Cox’s vAuto Live Market View has noted that as vehicle inventory has dwindled, shoppers will face challenges when seeking the right vehicle. This scarcity will likely position existing inventory as more valuable, resulting in higher prices due to tariffs on new supplies that are due to hit the market in the summer months. Consequently, the report forecasts slowing sales as prices increase in the face of diminishing availability.
In corroboration, insights from the Q2 Cox Automotive Dealer Sentiment Index indicate a growing apprehension among dealers regarding forthcoming market conditions. Although many dealers recognized the immediate uptick in sales thanks to tariff-driven urgency, they expressed concerns over the long-term consequences of current trade policies, forecasting a sustained cooling in the market.
Detailed Sales Predictions for May 2025
The following detailed breakdown outlines anticipated sales figures across various vehicle segments:
| Segment | May 2025 Sales | May 2024 Sales | April 2025 Sales | YOY % Change | MOM % Change |
|---|---|---|---|---|---|
| ------ | ---- | ---- | --- | -- | ---- |
| Mid-Size Car | 70,000 | 76,786 | 67,191 | -8.8% | 4.2% |
| Compact Car | 110,000 | 110,671 | 109,064 | -0.6% | 0.9% |
| Compact SUV/Crossover | 255,000 | 244,294 | 249,639 | 4.4% | 2.1% |
| Full-Size Pickup Truck | 210,000 | 196,484 | 199,192 | 6.9% | 5.4% |
| Mid-Size SUV/Crossover | 245,000 | 233,167 | 242,491 | 5.1% | 1.0% |
| Other Segments | 610,000 | 591,686 | 595,423 | 3.1% | 2.4% |
| Grand Total | 1,500,000 | 1,453,088 | 1,463,000 | 3.2% | 2.5% |
This data reiterates the trend of higher pricing and lower availability, instilling uncertainty across the automotive market.
Conclusion
As we wrap up this analysis of May's new-vehicle sales forecast, the insights provided by Cox Automotive reflect broader economic apprehensions tied to tariff impacts and market dynamics. Moving forward, consumers and dealers alike will need to navigate a series of challenges as they adjust to shifting supply and demand relationships in the automotive sector.
Topics Auto & Transportation）
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