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U.S. Auto Sales Show Signs Of Plateauing

Jun 14, 2016

Sales of cars, light trucks and SUVs fell 6% last month, to 1.54 million, according to AutoData Corp. This represented the biggest monthly drop in nearly six years. The decline was unusual for May, a month when Americans typically buy cars ahead of summer road trips, but May 2016 had two fewer selling days compared to May 2015.

The declines could be a sign that U.S. auto sales are finally reaching a plateau after six straight years of growth—a streak not seen since the 1920s. Sales rose 6% between 2014 and 2015, but are only up 1.2% so far this year.

The May results were enough for LMC Automotive, a forecasting firm, to lower its full-year sales prediction to 17.7 million, down from its previous target of 17.8 million.

Flattening sales could be good for consumers in the short term. Automakers are offering more discounts in order to keep sales growing, with incentives rising 7% in May to an average of $3,034 per vehicle.