New-Vehicle Sales to Remain Flat in May, KBB Says

New-vehicle sales in May are expected to total 1.53 million, essentially flat compared to the same time last year, according to Kelley Blue Book.

Retail sales are expected to account for 80.5% of the month's volume, representing a slight increase compared to the year before, and also representing a slight year-over-year decrease in fleet volume.

"We could see a positive month for the industry for the first time this year in May, but Kelley Blue Book expects totals to finish about even year-over-year, despite one extra selling day in 2017," said Tim Fleming, analyst for Kelley Blue Book.  "Retail numbers for May are expected to finish strong, however they continue to be supported by considerable incentives and lease subvention.”

General Motors sales are expected to improve in May, led in large part by the popularity of the company’s new GMC Acadia and Buick Envision, the firm noted. Conversely, KBB expects Hyundai-Kia’s higher mix of cars in its portfolio — in a market that continues to see consumer preference shift toward SUVs — to result in a large decline in sales for the manufacturer.

"Consumers are continuing to defect from the mid-size car segment at a rapid pace," said Fleming.  "Most commonly, they are turning to the compact SUV/crossover segment.  As such, Kelley Blue Book expects mid-size cars to lose more than one point of share in May, while compact SUVs are expected to pick up nearly one point of share."

This year, KBB forecasts new-vehicle sales in 2017 to total in the range of 16.8 million and 17.3 million units, which would represent a 1% to 4% decline from 2016’s record-setting performance.