Latest news with #CharlieChesbrough
Yahoo
27-05-2025
- Automotive
- Yahoo
Cox Automotive Forecast: May New-Vehicle Sales to Cool After Tariff-Fueled Surge, 16M SAAR Expected
May's new-vehicle sales pace is forecast to reach approximately 16.0 million, up slightly compared to last May's 15.8 million pace but down from April's strong 17.3 million level. The sales volume of new vehicles for May is projected to reach 1.50 million units, representing an increase of 3.2% compared to the same period last year and a rise of 2.5% from April. May is likely the last month to exhibit pull-ahead sales gains, and sales momentum is expected to slow further in the months ahead. ATLANTA, May 27, 2025 /PRNewswire/ -- May new-vehicle sales, when reported early next week, are expected to show a slower sales level from March and April's tariff-inspired buying surge, according to the Cox Automotive forecast released today. The May seasonally adjusted annual rate (SAAR), or sales pace, is forecasted by Cox Automotive to reach approximately 16.0 million, up slightly from last May's 15.8 million level. However, this represents a significant decline from March's 17.8 million and April's 17.3 million pace. Sales volume in May is expected to rise 3.2% from last year and 2.5% from last month. This month's gains, however, are overstated because May has one more selling day than last year or last month. "The vehicle market has been particularly strong since new tariff announcements in March, as many vehicle shoppers who were considering buying this year decided to pull ahead their purchase, before higher prices hit the market," said Charlie Chesbrough, senior economist at Cox Automotive. "However, much of that pull-ahead demand has now been satiated, so consumer demand is expected to fall this month." According to Cox Automotive's vAuto Live Market View, strong vehicle sales in March and April led to tighter inventory levels. New-vehicle inventory at the start of May totaled 2.49 million units on U.S. dealer lots, down 7.4% from the start of April and lower by 10.5% from a year ago. Days' supply was 66 at the beginning of May, down six days from the previous measure at the start of April. "Available inventory on dealer lots has declined significantly over recent weeks," noted Chesbrough. "Finding the right vehicle will be more challenging for shoppers. Additionally, prices will be high as existing inventory becomes less available and more valuable due to tariffs on incoming replacement supply. As more tariffed products replace existing inventory over the summer, prices are expected to be pushed higher, leading to slower sales in the coming months." These concerns are echoed in the Q2 Cox Automotive Dealer Sentiment Index, released last week. The quarterly survey, conducted in late April and early May, revealed that dealers are increasingly wary of future market conditions. While many acknowledged the short-term lift in sales from tariff-driven urgency, the broader sentiment reflected anxiety about a cooling market and the long-term impact of trade policies. As expected, newly implemented tariffs by the Trump administration were a dominant theme in dealer responses, reinforcing the forecast of a cooling market in the months ahead. May 2025 New-Vehicle Sales ForecastSales Forecast1 Market ShareSegment May-25 May-24 Apr-25 YOY% MOM% May-25 Apr-25 MOM Mid-Size Car 70,000 76,786 67,191 -8.8 % 4.2 % 4.7 % 4.6 % 0.1 % Compact Car 110,000 110,671 109,064 -0.6 % 0.9 % 7.3 % 7.5 % -0.1 % Compact SUV/Crossover 255,000 244,294 249,639 4.4 % 2.1 % 17.0 % 17.1 % -0.1 % Full-Size Pickup Truck 210,000 196,484 199,192 6.9 % 5.4 % 14.0 % 13.6 % 0.4 % Mid-Size SUV/Crossover 245,000 233,167 242,491 5.1 % 1.0 % 16.3 % 16.6 % -0.2 % Other Segments 610,000 591,686 595,423 3.1 % 2.4 % 40.7 % 40.7 % 0.0 % Grand Total 1,500,000 1,453,088 1,463,000 3.2 % 2.5 % 1 Cox Automotive Industry Insights data About Cox AutomotiveCox Automotive is the world's largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, auto manufacturers, dealers, lenders and fleets. The company has 29,000+ employees on five continents and a portfolio of industry-leading brands that include Autotrader®, Kelley Blue Book®, Manheim®, vAuto®, Dealertrack®, NextGear Capital™, CentralDispatch® and FleetNet America®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately owned, Atlanta-based company with $23 billion in annual revenue. Visit or connect via @CoxAutomotive on X, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn. View original content to download multimedia: SOURCE Cox Automotive
Forbes
27-05-2025
- Automotive
- Forbes
Tariff Effects Look To Spark Tough Summer
After an initial rush to purchase vehicles before import tariffs kicked in, the sales rate has ... More slowed and prices are likely to increase. It was all going so well. Sales for both new and used vehicles were already skipping along at a brisk pace. After Pres. Trump announced tariffs on imported vehicles sales then accelerated into overdrive when consumers stormed showrooms to avoid the expected price hikes. But as British troubadours Chad and Jeremy sang long ago, that was yesterday, and yesterday's gone. Cox Automotive senior economist Charlie Chesbrough briefing media on market conditions during an ... More event at the Manheim Detroit wholesale vehicle auction facility on May 22, 2025. 'It's really tomorrow that we're worried about, and that's because these tariffs are really going to start to have an impact on the market here over the next couple of months,' said Charlie Chesbrough, senior economist at Cox Automotive, during a media event at the company's Manheim Detroit wholesale auto auction facility. 'We think that there's going to be a situation where the selling pace of both the new and the used market is likely to shift into a slower pace here over the summer months, as high vehicle prices start to hit the market.' The rush to score deals before the tariffs kicked in led to the seasonally-adjusted sales rate for new vehicles to jump to 17.8 million vehicles in March, and 17.3 million in April, according to Cox research. That squares with research from J.D. Power showing in March and April, approximately 149,000 extra vehicles were sold due to buyers re-timing their purchases on the expectation of significant future price increases. 'These re-timed sales will present a headwind to the industry sales pace for the balance of this year,' wrote Thomas King, president of the data and analytics division at J.D. Power. 'Despite this effect, retail demand for new vehicles remains robust, with retail sales expected to increase 1.1% over a year ago.' Used car sales saw a similar surge, although Chesbrough points out that's more typical of the spring selling season when consumers receive their tax refunds. In both cases, however, the buying frenzy has led to thinner inventories, meaning fewer discounts and higher prices, bad news at a time when vehicle affordability was just starting to attenuate from record highs. 'We actually went through a period where prices were contracting for quite a time in the new vehicle market,' pointed out Chesbrough. 'But now you can see they're starting to rise again, and with these tariffs coming in over the course of the summer, that's going to put even more pressure on these prices and in the used vehicle markets, a similar story as well.' Prices for used vehicles are starting to increase due to lean inventories of trade-ins and vehicles ... More coming off-lease. The average transaction price for new vehicles rose 1% last month from a year ago and about $1,000 from March to about $48,700. For used vehicles, the ATP stood at $25,547, down from the peaks during the days of lean inventories caused by Covid-era production slowdowns, according to Cox research. The numbers from J.D. Power differ slightly, but not the trend. 'The average used-vehicle price is trending towards $29,168, up $130 from a year ago,' wrote King. 'This reflects the combination of reduced supply of recent model-year used vehicles—due to lower new-vehicle production during the pandemic—fewer lease maturities and manufacturers moderating discounts.' But in both cases, consumers' budgets are likely to be further challenged as we head into the summer. 'Our expectation is over the course of the summer, those prices are going to rise even more quickly,' predicted Chesbrough. Auction lanes at Manheim Detroit where used vehicles are sold to dealers. Stark evidence of price increases for used vehicles is seen at the sprawling Manheim Detroit facility and the other Manheim sites, where dealers bid on vehicles to fill their lots through both online and in-person auctions. The selling price at those auctions rose an average of about 4.9% in April with the largest increase of 5.5%, according to Chesbrough. That includes the full breadth of body styles for internal combustion engine and electric vehicles. Propping up used vehicle values is the dearth of trade-ins and turned-in lease vehicles caused by the Covid-era production and sales slump. But with both the sales and leasing pace seeing sharp increases since then, the supply of used vehicles coming to auction is expected to surge in the next couple of years, but with a distinct change in category. With battery electric and hybrid vehicles leasing at more than a 50% rate the last few years, Chesbrough expects 'We're going to see a whole bunch of those electric vehicles coming to auction. In fact, about 500,000 are expected in 2027.' Consumer sentiment is at its lowest point since the Great Recession in June, 2022, according to the ... More University of Michigan. But in the near-term, despite some automakers vowing to absorb the costs of import tariffs, eschewing price increases, the combination of the levies and the overall state of the economy has consumer confidence as its lowest point since June of 2022 during the Great Recession, according to the University of Michigan consumer sentiment study. 'We were recovering,' said Chesbrough. 'But then once we got past the election and Trump started talking about these tariffs, we've fallen off a cliff since last December. The concern is that when you have consumers in this situation where they're really concerned about the outlook for the U.S. economy, it almost becomes a self-fulfilling prophecy. They start pulling back on their consumption.' Indeed the title of another long-ago hit may predict what's up ahead could very well turn out to be a 'Cruel Summer.'
