Demand for Light Trucks Bolsters July New-Car Sales
Total (retail and fleet) U.S. new-vehicle deliveries in July are expected to rise 2.4% to 1.545 million units vs. 1.509 million units in the same month a year ago. The growth in sales, which is supported by demand for light trucks, is also aided by one extra weekend in the month this year, according to a mid-month U.S. sales update from J.D. Power and auto forecasting partner LMC Automotive. Both months in each year have 26 selling days.
Based on data collected in the first 19 days of July, retail new-vehicle deliveries for the month are expected to reach 1.318 million units, up 2.1% from last July’s 1.291 million units. Fleet deliveries are predicted to climb 4.5% in July to 227,000 units, which will help eke out a slightly higher increase in total sales for the month.
Trucks account for 60.8% of retail new-vehicle sales so far in July, which is exceptional since truck deliveries of more than 60% of the total market have occurred just four times on record, according to the forecast.
“July is a strong month for the industry in terms of consumer spending,” said Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power. She suggested, “While incentive spending continues to rise and is at its highest level so far in 2016 ($3,680 per vehicle), the strong truck mix continues to bolster record-level transaction prices. Consumer spending in July will hit its highest level so far in 2016.”
Looking ahead, Jeff Schuster, senior vice president of forecasting at LMC Automotive, said, “This is proving to be a dynamic year in terms of automotive demand volatility…with continued low interest rates and higher incentives helping demand.” Schuster adds that 2016 will be historic, either as the first year of decline since 2009 or as a record sales year that nudges past 2015. “It is that close at this stage and could go either way,” Schuster said.