US: Vehicle sales likely slowed to 16.6mn in May – Nomura

Analysts at Nomura expect the US vehicle sales to slow to 16.6mn saar in May (Consensus: 16.7mn), from 17.1mn saar in April.

Key Quotes

“Vehicle sales in April registered a 17.1mn saar, surprising to the upside, but we think sales will continue to slow following the continued downward trend after a surge in replacement buying activity in Q4 2017. That said, consumer purchases of autos remained steady in April, implying that consumer demand remains firm. If automakers spent more than usual on Memorial Day holiday promotions to unload high inventories, May’s vehicle sales figure could surprise to the upside.”

“Looking through monthly volatility, although a strong labor market and gains in real disposable income will likely support consumer demand, sales boosted by high incentive spending and tight lending standards on auto loans point to some downside risk for auto sales in 2018.”