Consumers are continuing to pass on compact and mid-size cars in favor of full-size truck, SUV and crossover vehicles, according to Kelley Blue Book.
In its May sales forecast on Wednesday kbb.com reported that though larger vehicles are winning over more buyers, new vehicle sales are still expected to remain flat year-over-year at a total of 1.53 million units for the month, resulting in an estimated 16.7 million seasonally adjusted annual rate (SAAR).
“We could see a positive month for the industry for the first time this year in May, but Kelley Blue Book expects totals to finish about even year-over-year, despite one extra selling day in 2017,” said Tim Fleming, analyst for Kelley Blue Book.
“Retail numbers for May are expected to finish strong, however they continue to be supported by considerable incentives and lease subvention,” Fleming added. “In recent months, leasing appears to be reaching its peak, which is expected, given declining residual values and which is contributing to this year’s slowing sales.”
Yet again, there is a clear divide in the market between cars and light trucks, and in May, Kelley Blue Book anticipates the sales mix of cars to reach 38 percent, down 3 percent year-over-year.
While SUV segments continue to see the most significant gains, full-size trucks are expected to increase market share by 0.5 percent in May, though deeper discounts and incentives are partially responsible for the growth.
“Consumers are continuing to defect from the mid-size car segment at a rapid pace,” said Fleming. “Most commonly, they are turning to the compact SUV/crossover segment. As such, Kelley Blue Book expects mid-size cars to lose more than one point of share in May, while compact SUVs are expected to pick up nearly one point of share.”
The chart below breaks down sales by vehicle type for May 2017 and May 2016. Full-size pickups are expected to get the second biggest sales gain this month at 4.3 percent following crossover sales which are expected to rise 9.8 percent.