August U.S. Auto Sales Set for Another Dip
Labor Day sales events plus robust demand for trucks may be needed to boost August total (retail and fleet) new-vehicle sales in the United States, which are slated to decline 5.2% from a year ago, according to a monthly update from J.D. Power and auto forecasting partner LMC Automotive. Sales in August are expected to reach 1.493 million units vs. 1.575 million units in the same month a year ago.
Based on data collected during the first 17 days of August, retail new-vehicle deliveries will reach 1.269 million units, 6.5% below last August’s 1.358 million units. Fleet sales are anticipated to rise 3% to 223,000 units and make up 15% of the mix.
Trucks continue to thrive, accounting for 59.6% of retail sales, which is up from a 57.5% share of the market a year ago. This August’s truck share is the highest for any August, but below the record retail truck share of 60.6% in July 2016.The mid-month update reveals that the average new-vehicle retail transaction price in August is $30,942—a record for the month. Incentive spending also is the highest for any August, averaging $3,559, although below the highest incentive spending historically—$3,753 in December 2008.
“Following 66 straight months of retail sales growth—beginning in September 2010—we’ve seen four declines in the past six months,” said John Humphrey, senior vice president of J.D. Power’s global automotive practice. He added: “Softening retail sales amid low interest rates, cheaper gasoline, and automakers pushing more aggressive incentives—which are close to record levels—may indicate that growth in this cycle will be difficult.”
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “The auto industry faces an uphill struggle to match last year’s performance. Mixed economic signals indicate that U.S. auto sales may have peaked in 2015. However, there is still a sustainable high level of demand.” He reassures that “peak does not mean doom and gloom.” LMC’s 2016 calendar-year total sales forecast remains at 17.4 million units—a dip of 0.3% from 2015.