Unit sales of domestically produced cars and light duty trucks (including sport utility vehicles and mini-vans). Individual manufacturers report usually report sales on the first business day of the month. Motor vehicle sales are good indicators of trends in consumer spending. Why Investors Care
| Released on 6/3/08 For May 2008 | ||||||||||||
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Highlights
Vehicle sales proved very weak in May, at a 10.3 million annual sales rate that is down from 10.5 million in April and the worst results since July 1998. Light trucks sold at a 6.0 million rate for the worst results since 1995 to underscore GM's announcement today that it is closing four light truck plants and is putting Hummer on the sales block. (The total rate of domestic-made sales is 10.5 million with imports at 3.7 million.)
Consumers moved to cars which, at an 8.2 million rate, showed the strongest results since January 2006. Cars are significantly less expensive than light trucks, a fact that will hurt bottom lines further in Detroit and also the sales total for the motor vehicle component of next week's Commerce Department report on retail sales.
Today's data are a negative for the economic outlook, suggesting that high gas prices are killing off light trucks as they killed off large American cars in the 1970s. Chain store reports on Thursday will offer the next look at retail sales.
Sales of domestic motor vehicles have been hard hit recently as consumer budgets have been squeezed by higher prices for food and gasoline. Sales of domestic light vehicles weakened further in April to a 10.4 million annual rate from 11.0 million in March. Sales of trucks continued to decline, falling to a 5.5 million rate for domestics from 6.2 million in March. The big question for May is whether stimulus package income tax rebate checks will provide some lift after initial deliveries of the checks during April.
Motor vehicle domestic sales Consensus Forecast for May 08: 10.8 million-unit rate
Range: 10.2 to 11.0 million-unit rate
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Motor vehicles sales slowed notably in 2006 as a result of higher interest rates and a jump in gasoline prices but remained at reasonable levels due to strong income growth. Late in 2006 and in early 2007, gasoline prices were down from 2006 highs but moderating economic growth kept sales from rebounding. Truck shares hit their peak in 2005 when gasoline was cheap and remain sharply lower since gasoline prices spiked in 2006. |
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