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How US Auto Sales Shook Out in May 2017

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Nov. 20 2020, Updated 4:02 p.m. ET

Auto stocks in May

In May 2017, all mainstream auto companies traded on a negative note amid the broader market dullness. Through May 30, 2017, General Motors (GM) and Ford (F) lost about 3.2% and 3.4%, respectively, for the month.

Italian-American automaker Fiat Chrysler Automobiles (FCAU) saw value erosion of ~8.4% on a month-to-date (or MTD) basis. These performances are much worse than the MTD rise of 1.2% seen in the S&P 500 benchmark (SPY).

Month-to-date through May 30, US electric carmaker Tesla (TSLA) and Italian luxury carmaker Ferrari (RACE) gained about 6.7% and 13.7%, respectively.

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May 2017 US auto sales estimates

WardsAuto estimated that the seasonally adjusted annual rate (or SAAR) for US auto sales could be 16.8 million in May 2017. This reflects a decline from the SAAR of ~17.1 million reported in May 2016.

In the first four months of 2017, US auto sales have demonstrated weakness. According to Autodata, US auto sales stood at ~5.5 million units year-to-date through April 2017. These sales saw an ~2.4% decline from ~5.6 million vehicle units during the same period in 2016.

The US auto industry has witnessed high demand for heavyweight vehicles in the past couple of years. In 2016, auto sales in the US were at their highest, with about 17.6 million vehicles sold during the year.

However, weakness in the first four months of 2017 also ignited the debate whether US auto sales have already peaked. Continued weakness in May’s US auto sales data could hurt auto investors’ sentiments.

Ford (F) recently named Jim Hackett as its new CEO, a significant move that became effective on May 22. To learn more about this development, please read Could Ford’s New Leadership Boost Investor Confidence?

Series overview

In this series, we’ll take a look at some key macroeconomic indicators that should be tracked by auto investors when assessing future trends in auto sales.

We’ll also look at consumer confidence, industrial production, jobs-related data, and a variety of factors that may affect automakers’ profitability going forward.

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