August U.S. New Auto Sales Continue to Slide
Despite fat discounts to clear out last year’s models and an extra selling day, August new-vehicle sales are set to fall 2.9% (selling-day adjusted) from year-ago totals. A monthly update from J.D. Power and auto forecasting partner LMC Automotive also finds that SUVs and trucks already comprise 63.2% of retail new-vehicle sales—the highest level ever for the month.
August will be the fifth month of lower retail new-vehicle demand, consistent with a slowdown observed this year, according to J.D. Power’s Thomas King, vice president of PIN OEM Operations, Media & Marketing. On a brighter note, King said the upcoming Labor Day holiday provides a key opportunity for consumers and the industry.
“Labor Day is one of the most heavily shopped periods of the year, as consumers take advantage of promotions that typically extend through the first week of September,” King said, noting that in 2016, some 400,000 new vehicles were sold during the holiday period, accounting for nearly 3% of annual sales. The need to clear out old model (2017 and older) inventory will mean more aggressive discounts, King said.
Based on sales data through the first 17 days of the month, total (retail and fleet) new-vehicle deliveries in August are expected to decline 2.9% on a selling-day adjusted basis to 1.52 million units vs. last August’s 1.51 million units (27 selling days in August 2017 vs. 26 days in August 2016). Retail new-vehicle deliveries will slip the least—dipping 1.9% from last August to 1.28 million units—while the fleet portion will take the biggest hit (-8.3%), accounting for 16% of the mix.
Commenting on the future market, Jeff Schuster, LMC Automotive senior vice president of forecasting, said it’s paramount for the industry to focus on transition in segments.
“The further market shift toward SUVs will need to be balanced with the future push toward electric vehicles (EVs) and investment in future mobility,” Schuster said.
SUVs are expected to grow to more than 42% of total light-vehicle sales this year—up 2 points from 2016—at the expense of cars, which will give up 2 points (33% share).