Hurricane Distress Mixes Up September U.S. Auto Sales
Losses from Hurricanes Harvey and Irma created pockets of strength and weakness in September new-vehicle sales, according to an update from J.D. Power and auto forecasting partner LMC Automotive. Overall, U.S. new-vehicle deliveries in September are expected to fall several points from a year ago, even with one more selling day this year (26 days vs. 25 days).
“On a national basis, September deliveries are down 0.8% from last year, but in the South Central region, which includes Houston, sales are up 14% as shoppers replace storm-damaged vehicles,” said Thomas King, J.D. Power senior vice president of the Data and Analytics division. However, he says the Southeast region, which includes Florida, saw sales decline 16% as the region recovers.
Based on data collected during the first 19 selling days of September, total light-vehicle deliveries (retail and fleet) will reach 1.433 million units for the full month—down 4% from last September’s 1.435 million units, when there was one less selling day. Retail deliveries are set to dip 2.5% on a selling-day adjusted basis to 1.213 million units and fleet deliveries will decline 11.2%, accounting for 15% of the sales mix vs. 17% last year.
Even though incentives have reached record highs—averaging $4,050 per unit in September—to help automakers clear out inventories of prior year models, new-model-year deliveries account for only 17% of sales this month vs. 28% in September 2016. Additionally, 65% of retail sales through Sept. 24 are light trucks—the highest for any September.
In further analysis, J.D. Power’s King said there may be an upside in coming weeks for the Southeast market as buyers complete delayed purchases. Also, LMC Automotive’s Jeff Schuster, senior vice president of forecasting, predicts that losses from Hurricanes Harvey and Irma will drive new-vehicle demand through the rest of 2017 into 2018—with a need to replace at least 500,000 damaged or destroyed vehicles. This uptick will also include a short-term bump to replenish rental car fleets and will mean an upward adjustment to LMC’s total light-vehicle outlook by 70,000 units to 17.1 million unit sales.