Pittsburgh — US total new vehicle sales in May surged over 50% compared with the previous month's buying activity as consumer demand recovered with the easing of coronavirus pandemic-related restrictions, financing incentives and Memorial Day weekend sales, according to industry consultants.
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Analysts with Cox Automotive said May new vehicle buying in the US rose 57% month on month to 1.1 million units, according to a report June 4. However, sales in May were still down 30.2% year over year, the analysts added.
"May 2020 was the worst May since the Great Recession, but the result was another step forward in the industry's recovery from the economic struggles caused by COVID-19," Cox said. "The million-plus sales in May demonstrate that as markets reopen and dealerships learn to manage sales while following social distancing rules, demand will return."
The year-over-year decline in May was less drastic than the respective 50% drop in April.
Cox said year-to-date sales in the US through the end of May stood at 5.32 million vehicles, down about 23% compared with the same period last year.
"Even if sales move back to normal in the second half of the year, an unlikely scenario considering our current economic conditions, sales in 2020 still finish down double-digits versus 2019," Cox said.
Cox said automobile buying would still be pressured by high unemployment, low consumer confidence and limited inventory.
Automotive industry consultant Edmunds said generous financing offers and incentives during Memorial Day weekend helped boost sales in May.
The consultants also estimated that 1.1 million new vehicles were sold during the month, up 50.5% month-over-month but down 32.5% year over year.
"We can safely say that April was the bottom for auto sales during the coronavirus pandemic," Jessica Caldwell, Edmunds' executive director of insights, said in a recent report. "There's still a long road to recovery ahead, but May auto sales are a really encouraging sign for the industry. The unprecedented deals broadcast by automakers and dealers really did the trick in getting more consumers to reenter the market, social distancing and all."
Edmunds said consumer demand is expected to grow, even as financing incentives are withdrawn and inventory becomes tight.
General Motors led all North American automakers in expected May sales with 186,325 units, according to Edmunds data.
Edmunds data indicated that Toyota saw the biggest increase in sales from April, rising 79.9% to 152,336 units in May.