U.S. vehicle sales dropped to 16.66 million seasonally adjusted annualized units from April’s 16.88 million, reflecting the fifth consecutive month of year-over-year sales decreases.
In May, car sales fell to an annualized rate of 6.2 million while light-truck sales remained at April’s rate of 10.5 million.
Lower trade-in values and higher interest rates contributed to the decrease, according to the National Association of Federally-Insured Credit Unions (NAFCU).
“Used-car prices decreased for the tenth straight month in April according to the National Automobile Dealers Association.,” NAFCU Research Assistant Yun Cohen said in the Autodata Corp report. “As the selling pace slows, inventory levels are swelling. According to J.D. Power, the average days to turn for the industry (to sell inventory) exceeded 70 days for the first time since 2009.”
Nissan, Ford, Honda, Subaru and Volkswagen posted year-over-year sales increases while General Motors, Fiat Chrysler and Toyota saw sales decreases.
Kelley Blue Book forecasts that industry sales will reach 17 million units in 2017 if sales continue at the current level.
Sedan sales dropped 20 percent in May, prompting Autotrader senior analyst Michelle Krebs to predict sedans are in trouble and production will be scaled back.
Millennials are leading this trend with their preference to SUVs and light trucks.
The average vehicle price nationwide in May was $33,500.