Auto Bloodbath: Lowest Domestic Auto Sales In Three Years Despite Record Inventories And Incentives

After abysmal March and April prints and growing speculation on Wall Street that auto sales are looking less like a "plateau" (Ford's term) and more like a debt-fueled bubble on the verge of a "2007-like" collapse (Bloomberg's term), analysts were looking toward May auto sales for signs of hope. Unfortunately, the "hope" fizzled for the 5th straight month as overall auto sales declined again, with domestic light vehicles sales printing at an annualized 12.59 million, the lowest sales number going back more than three years, with GM missing badly even as its dealer inventory rose to a post-bankruptcy record "channel stuffing" high, while those carmakers who did beat expectations, did so by using record incentives and discounted sales to rental and other fleet customers (such as Ford).

Here's the math: domestic car sales continued their decline on a year-over-year basis, although there was a silver lining within SUVs and pickup trucks, which rose for many manufacturers. May car sales came in at an annualized 4.50 million units (according to Stone McCarthy calculations), compared to April's pace of 4.80 million, and last May's 4.98 million. Light truck sales declined in May to 8.09 million compared to the 8.32 million selling pace reached in April, and below the 8.13 million units sold a year ago. In total, May domestic light vehicle sales fell to 12.59 million units, below expectations and far below April's 13.12 million selling pace. In fact, as shown in the chart below (blue column) this was the worst monthly print going back more than three years.

More