(Reuters) - U.S. auto sales in May will edge up 0.5 percent from a year earlier, despite consumer discounts remaining at record levels, industry consultants J.D. Power and LMC Automotive said on Thursday.
U.S. new vehicle sales in May will be about 1.54 million units, compared with 1.53 million units, a year earlier.
The forecast was based on the first 17 selling days of the month.
The seasonally adjusted annual rate for the month will be 16.9 million vehicles, down from 17.3 million last year.
The consultancies cut new vehicle sales forecast for 2017 to 17.2 million units from 17.5 million units.
U.S. sales of new cars and trucks hit a record high of 17.55 million units in 2016. But as the market has begun to saturate, automakers have been hiking incentives to entice consumers to buy.
Major automakers posted declines in U.S. new vehicle sales for April, an indication of the long boom cycle that lifted the American auto industry to record sales last year losing steam. (reut.rs/2qnsNQa)
“While consumers will see substantial discounts this Memorial Day weekend, they are not expected to overcome the slowing demand in auto sales,” said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power.
The consultancies said consumer discounts averaged $3,583 per unit, a record for the month, surpassing the previous high for the month of $3,342, set in May last year.
The average number of days a new vehicle sits on a dealer’s lot before being sold hit 71 in the first 14 days of May, the highest level for any month since July 2009.
Reporting by Arunima Banerjee in Bengaluru; Editing by Arun Koyyur