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(Bloomberg) -- U.S. May light vehicle seasonally adjusted annual rate (SAAR) estimate 16.8m vs 17.2m y/y. Sales during the Memorial Day weekend would "make or break" the month, analysts say. Incentive growth is seen moderating, even though the holiday weekend may have had some aggressive promotions.

• Most automakers report monthly sales Thursday pre-market
• See Bloomberg estimate chart
• GM supply chain; Ford supply chain; FCAU supply chain
• Bloomberg Intelligence primers for GM, Ford, Fiat Chrysler
  • BI credit primers for GM, Ford, Fiat Chrysler
• 1Q results GM, Ford, Fiat Chrysler

ANALYST COMMENTARY:

• Goldman Sachs (David Tamberrino): Channel checks indicate pace of sales has remained steady but subdued throughout the month and most of the forecast is back-end weighted to Memorial Day weekend sales events; seeing more moderate growth in incentives through mid-month, tracking up ~$240/vehicle y/y, but down $40/vehicle sequentially; says incentives could finish +$300 to +$400/vehicle y/y just to hit the high 16m SAAR forecast
• JPMorgan (Ryan Brinkman): Checks indicate pace of y/y increase in incentives continues to moderate; says average transaction prices (ATPs) expected to rise y/y in May, despite higher y/y incentives, given richer mix of crossover utility vehicles (CUVs), sport utility vehicles (SUVs), and full-size pickup trucks as a percent of total sales
• Barclays (Brian Johnson): Another sub-17m print would add to the scrutiny around the U.S. auto cycle; debate at this point is not whether the cycle will get worse, but rather if the cycle will be more of a gradual erosion or if it is in imminent danger; incentive spend easing, driven by GM
• RBC (Joseph Spak): Memorial Day weekend sales are likely to make or break the month; wouldn’t be surprised to see more aggressive transactions over the holiday to help ease inventory; forecasts 16.8m SAAR vs April’s 16.9m and 17.2m y/y
• Wells Fargo (David Lim): Channel checks suggest SAAR is on pace for high 16m to 17m units; says if the industry meets or exceeds 17m SAAR, fleet pull forward likely; given the backdrop, "would not be surprised" if daily selling rates are negative this month
• Buckingham (Glenn Chin): Expects both GM and Ford to outperform industry sales slightly, likely due to increased incentive activity surrounding holiday weekend; says GM inventory levels will remain elevated; sees U.S. light vehicle SAAR of 17.2m units; expects shares of auto retailers to react well to a ~17m SAAR given weakness in stocks YTD

ESTIMATES:

• Big 3 ests.:
  • GM: +4.3%
  • Ford: +0.1%
  • Fiat Chrysler: -3.9%
• Other ests.:
  • Toyota: -1.3%
  • Honda: -0.7%
  • Nissan: +0.6%
  • Hyundai/Kia: -1.9%
  • Volkswagen/Audi: +3%
• NOTE: May 2017 had 25 selling days, one more than 2016

RELATED:

• May 26, Used Car Prices to Keep Slumping, Topping Expectations: Height
• May 25, GM Accused of Using VW-Like Defeat Devices in Some Trucks
• May 22, Ford’s Dream of Stock Performance May Stay a Mirage: Street Wrap
• May 2, Automakers Lack Compelling Models to Lure Buyers: Street Wrap

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Jeremy R. Cooke