Sales Pick Up in Late May
CNW reported this week that sales picked up in late May, with the firm expecting deliveries for the month to increase 11% from a year ago.
BANDON, Ore. — The first 15 days of May showed a modest 6% increase in vehicle deliveries, but the pace picked up toward the end of the month, according to CNW Research. The firm said deliveries were on pace to increase 11% from a year ago.
CNW pointed to a decrease in its Jitter Index as a reason (down .73% from April and down 1.12% from a year ago). It measures consumer sentiment regarding home-centric economic issues. “Americans are less jittery about their home-centric plight than either last year or last month — a positive sign that they are willing to open the bank vault and spend a little more,” wrote CNW’s Art Spinella in the firm’s monthly newsletter.
Another positive sign, the firm noted, was the 7.6% increase in dealership visits. “And those walk-ins are clearly qualified buyers,” Spinella wrote, noting that closing rations were up 14.4% from a year ago and up 1.4% from April.
The firm did note that subprime approvals were down 7.8% from a year ago, but on a month-over-month-basis, approvals appeared to edge up. “The average FICO score of those who bought a new vehicle in the first half of May stood at 641.8 compared to 645.2 a year ago,” Spinella wrote. “Financial institutions are cracking open the approvals for slightly less qualified shoppers.”
The average MSRP for vehicles sold in May topped $38,300, a 1.2% gain. Transaction prices, however, were depressed by 0.6%. The reason, Spinella noted, were total discounts — including manufacturer incentives and dealership spiff to consumers from profits — increased more than 10% vs. one year ago.
According to the firm, manufacturer per-unit incentives, including lease promotions, loyalty programs, dealer incentives, added equipment and more, topped $4,600. “That’s a 3% jump just since last month and plays an important role in the strength of the May sales figures,” Spinella noted.
“As we pointed out two months ago, this spring and summer should provide great sales environments,” Spinella added. “What will be interesting is to see the GM sales figures considering all the recall coverage.”
Originally posted on F&I and Showroom
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