February 2018 U.S. Auto Sales Retreat with Leaner Rebates
New-vehicle sales data collected during the first 15 selling days of the month project that retail new car and light-truck deliveries will drop by 3%, to less than 1 million (997,300 units) from 1.03 million units in February 2017.
Although transaction prices continue to hit record levels, “the first year-over-year drop in incentive spending in more than four years is anticipated,” according to Thomas King, senior vice president of Data and Analytics at J.D. Power. He said the incentive spend during the first three weeks of February averaged $3,840, which was down by $14 from the year-ago figure.
It’s notable that U.S.-based automakers are reducing their incentive spend on specific categories—domestic trucks and SUVs—the mid-month forecast reports. For instance, incentives on these trucks and SUVs have fallen by an average of $450 in February to date. In contrast, incentives on foreign-based manufacturers’ trucks and SUVs have risen an average $482. Incentive spending on all cars, no matter which automaker, has increased by $80.
The mid-month forecast indicates that the reduction in incentive spending may be short-lived, as a $450 decline in domestic truck and SUV incentives coincides with a significant decline in market share for these vehicles. The domestics’ share—General Motors, Ford Motor Co., and Fiat Chrysler Automobiles (FCA)—of both truck and SUV segments fell 3.2 percentage points to less than one half (49.2%) this month compared to a year ago.