Page 25 - On The Move - Volume 17, Issue 3

On a year-over-year basis, all major market
segments saw seasonally adjusted price declines in
May. Luxury cars outperformed the overall market,
while most other major segments underperformed
the overall market.

RECOVERING RETAIL RESULTS
FOR VEHICLE SALES.
According to Cox Automotive estimates, total used
vehicle sales volume was down 22.4% year-over-
year in May. We estimate the May used SAAR to
be 32.0 million, down from 39.2 million last May
but up from April’s 27 million rate. The May used
retail SAAR estimate is 16.7 million, down from
21.0 million last year but up month-over-month
from April’s 14.4 million rate.

Wholesale prices are stabilizing as the excess supply
of used vehicles comes down. Using a rolling seven-
day estimate of used retail days’ supply based on
vAuto data, we see that used retail supply peaked
at 115 days on April 8. Normal used retail supply
is about 44 days’ supply. It ended May at 33 days.
We estimate that wholesale supply peaked at 149
days on April 9, when normal supply is 23. It was
down to 39 days by month end.

May total new vehicle sales were down 30%
year-over-year, with the same number of selling
days compared to May 2019. The May SAAR came
in at 12.2 million, a decrease from last year’s 17.4
million but up from April’s 8.6 million rate.

Combined rental, commercial, and government
purchases of new vehicles were down 83% year-
over-year in May. New vehicle sales into the Rental risk prices were up 6.4% compared to April. largest in the history of the data back to 1959.
rental channel fell 91% year-over-year in May. Average mileage for rental risk units in May (at The new home sales SAAR increased 0.6% in April,
Retail sales of new vehicles were down 16% 46,300 miles) was up 2% compared to a year ago which far outperformed consensus expectations of
year-over-year in May, leading to a retail but down 10% month-over-month. a 23% decline. The pace of new home sales is now
SAAR of 11.6 million, down from 14.0 million down 6.2% from a year ago. Unlike new home
last May but up from April’s 7.9 million rate. CORONAVIRUS UNCERTAINTY sales, the pending home sales index for April
Fleet sales are down 38% in 2020 through AMID DECLINING CONDITIONS. declined 21.8%, which was the worst monthly
May, and retail sales are down 19%, as The first revision of the estimated first-quarter decline in the data series, which goes back to
the overall new vehicle market is down real GDP contraction came in at 5%, which was 2001. The decline in pending sales suggests that
23% so far this year. lower than the first estimate of a 4.8% decline. we may see weakness again in existing home sales
The principal driver of the downward revision was in May even with new home sales’ picking up and
New vehicle inventories came in around 2.6 million a substantial downward revision in the investment mortgage rates’ falling to all-time lows. However,
units. in business inventories. Consumer spending in total mortgage purchase applications are now higher
declined 13.6% in April with big declines in durable year-over-year. As lockdowns eased and pandemic
RENTAL RISK PRICING IMPROVES. goods, non-durable goods, and services; but fears lessened in May, both housing and the auto
The average price for rental risk units sold at spending on durable goods like vehicles declined markets seem to have bottomed in April.
auction in May was down 5.3% year-over-year. the most. The spending decline in April was the

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