U.S. auto sales expected to slip 5th-straight month

U.S. light-vehicle sales are projected to fall for the fifth straight month in May as the industry limps into the usually robust summer selling season.

Estimates from four forecasters call for declines of 2.1 percent to 3.2 percent from May 2018. Most automakers are scheduled to report their latest results on Monday.

The seasonally adjusted, annualized selling rate is projected to range from 16.9 million to 17.0 million, in line with full-year estimates for sales to come in below 17 million for the first time since 2014.

"It's going to be an up-and-down year," Jeremy Acevedo, Edmunds' manager of industry analysis, said in a statement. "Automakers are still figuring out how to balance supply with declining demand, but incentive budgets aren't big enough for dealers to offer deep discounts on a consistent basis. And when those bargains go away, so do the shoppers."

Estimates of incentive spending vary.

TrueCar's ALG said average incentive spending fell 10 percent from a year ago to $3,359 per vehicle. It also estimates that the average transaction price for a new light vehicle rose to $34,137, up 3.4 percent from a year earlier.

At the same time, J.D. Power/LMC Automotive said incentive spending per unit in May is on pace to be $3,722, up $25 from last year, as automakers bumped up some of their Memorial Day discounts.

"The expected sales decline in May, coupled with weak sales year-to-date has left the industry with rising inventories of unsold vehicles," Thomas King, senior vice president of J.D. Power's data and analytics division, said in a statement. "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."

Cox estimates that sales at all but three major automakers — American Honda, Hyundai-Kia and Subaru — will fall compared with May 2018. It predicts Ford Motor Co. will post the largest decline, 8.5 percent, followed by a 6.7 percent drop for Fiat Chrysler and a 5.2 percent slide for Nissan.

ALG also predicts Ford will fare worst with a 7.9 percent drop, followed by declines of 5.7 percent for Daimler and 4.7 percent for Nissan. ALG predicts sales gains for Kia, Hyundai, BMW and Tesla, which it recently started including in its monthly analysis.

It also predicts Subaru's streak of 89 consecutive monthly sales increases will end with a 0.5 percent drop. May has 26 selling days, the same as a year ago.

"The few brands showing sales growth year-over-year in May are doing so through new or redesigned SUV product," Eric Lyman, chief analyst for ALG, said in a statement. "This underscores the importance of automaker timing around lifecycle stage and product strategy that honed in on desirable segments in order to meet the demands of today's consumers."