New light-vehicle sales in May surprised many in the industry. The SAAR of 17.31 million units for the month represents an increase of 0.7% compared to May 2018. But the increase in May was not enough to offset the declines from earlier this year, and the result is a year-to-date SAAR of 16.84 million—a decline of 1.8% compared to this time last year.
Higher incentive spending, increased fleet sales and Memorial Day sales events helped boost sales in May. Light trucks continued to gain market share, representing 70.3% of all new light-vehicle sales through the first five months of the year. Crossovers continue to be extremely popular and are now just half a percentage point from reaching 40% market share.
Sales of new and used vehicles by franchise dealers have been solid so far in 2019, but we are concerned about the imposition of broad tariffs on all goods coming out of Mexico. The tariffs, which are set to increase by 5 percentage points each month (up to 25%), will likely add thousands of dollars to the sticker price of new vehicles and have the potential to reduce vehicle sales by several million units. Still, it is too early to see how much these tariffs will affect new light-vehicle sales this year, and we are sticking with our new-vehicle sales forecast of 16.8 million units for 2019.