Retail demand that was strong in April and during the first part of May appeared to erode in the week before and week following Memorial Day, Cox Automotive Chief Economist Jonathan Smoke told Automotive News on Monday. However, he said he was not convinced retail demand would see a more substantial erosion.
Retail used-vehicle prices are showing signs of depreciation, and interest rates on used vehicles have fallen since peaking in March and are pretty stable so far in June, Smoke said. There’s a “good chance” consumer demand could become stronger as the calendar year progresses and as long as the U.S. does not go into a recession, he added.
“I think people are waiting for the availability of a vehicle at a specific price or at a specific monthly payment,” Smoke said.
Cox Automotive estimated the retail used-vehicle supply in the U.S. was at 45 days at the end of May, unchanged from April but down from 49 days at the end of May 2022. Wholesale used-vehicle supply is estimated to have ended May at 24 days, down from 25 days at the end of April and 25 days at the end of May 2022.
Used-vehicle retail sales were steady in May compared with April, according to initial estimates from Cox Automotive. However, it estimated them to be down 11 percent year over year in May. It compiled those estimates by assessing retail vehicle sales based on observed changes in advertised vehicles tracked by vAuto.
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