March U.S. Car Sales to Dip Slightly—First Drop since 2010
March total (retail and fleet) new-vehicle sales in the United States may slip 1%* when adjusted for two extra selling days this year, according to a mid-month sales update from J.D. Power and auto forecasting partner LMC Automotive. March 2016 auto sales are forecast to reach 1.65 million units vs. 1.54 million in March 2015, but when factoring in the two extra selling days in March 2016 the daily selling rate is estimated to dip slightly compared with last March. Regardless of where the percentages fall, the projected March auto sales estimate still may be the strongest sum since March of 2000. In the mid-month analysis, car sales fell in double digits, while light-truck sales faltered slightly.
This month the seasonally adjusted annual sales rate (SAAR) for total car and light-truck deliveries is expected to drop by 100,000 units, to 17.0 million vs. last year’s 17.1 million-unit SAAR. In addition, retail deliveries are set to fall by 2%, to 1.3 million units vs. last year’s 1.23 million. The retail SAAR also is expected to slow in March to 13.4 million vs. 13.5 million units in March 2015.
In this month’s update, J.D. Power and LMC experts suggest that there may be softness or easing in March new-vehicle sales, though year-to-date deliveries are ahead of those in the same period a year ago. At the segment level, the update reports that retail car sales in March have fallen in double digits, and even truck deliveries have slipped by 2.8%. Even compact SUVs—a star volume segment—have posted a decline month-to-date.
Admittedly, the average transaction price of a new vehicle was $30,400 in March, the highest for any month, according to the update. Higher pricing is impacting the way consumers select a new vehicle. “Sales are being supported by factors including incentives, higher lease penetration (30% in March), and longer-term loans,” said Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power.
Yet, the outlook for the year remains robust, according to Jeff Schuster, senior vice president of forecasting at LMC Automotive, who said: “Year-to-date volume is still nearly 5% ahead of year-to-date March 2015, leaving some room for additional volatility and the expected slower growth rates later in the year.”
*Percentage changes are based on the number of selling days in a month. March 2016 has 27 selling days while March 2015 had 25.