Higher interest rates "will continue to act as a strong headwind on auto sales," analysts say.
U.S. auto sales are expected to be stronger than a year ago, but set to decline compared with April as concerns simmer about the U.S. economy and whether people will delay or forgo buying new cars amid rising interest rates and higher car prices.
Cox Automotive has forecast the annual new-vehicle sales pace in May to be near 14.9 million, up 2.3 million from last May’s 12.6 million pace but down from April’s 15.9 million level. Major U.S. carmakers are divided on how they report sales. Tesla Inc. TSLA and General Motors Co. GM report sales by quarter, doing so a few days after the end of a three-month period. Ford Motor Co. F reports by month, also announcing the numbers a few days after.Earlier Thursday, Chinese EV maker Nio Inc. NIO reported a 12% drop in May sales, sending U.S.-listed shares of Nio toward a three-year low.
“Improving” vehicle production is likely to fuel a modest increase in the seasonally adjusted annual rate, and inventories are expected to grow steadily and eventually bringing prices down, Rosner said. Citing TrueCar numbers, Narayan said that average transaction prices are benefiting from trucks. Incentives for SUVs and cars are “creeping up faster,” the analyst said.
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