Summer Sizzle Continues as New-Vehicle Sales in August Are Forecast to Hit Highest Levels of the Year
By Jeff Youngs, August 22, 2014
August is always a big month for car sales, and this month is no exception. New-vehicle retail sales and total sales are on pace to surpass May for the highest levels in 2014, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive. The forecast projects that light-vehicle sales will hit 1.3 million units and total light-vehicle sales will reach nearly 1.5 million in August 2014. Both of those figures are a 3% increase, on a selling-day adjusted basis, compared with August 2013.
August Sales Numbers Get a Boost from Labor Day Sales Events
Some of this increase is attributable to two of the three days of the long Labor Day weekend falling in August this year. Labor Day is typically the biggest single vehicle sales day of the year, since dealers traditionally offer year-end sales promotions at that time, and the next year's models arrive in the showrooms.
John Humphrey, senior vice president of the global automotive practice at J.D. Power, notes that continued high levels of consumer expenditures on new vehicles demonstrate the continuation of the overall health of the industry.
"We expect consumer spending on new vehicles in August to approach $39 billion, the highest level on record for the month of August and second-highest month ever behind July 2005 ($39.7 billion)," said Humphrey. "The record consumer spending is fueled by both high sales volumes and high transaction prices."
The average new-vehicle retail transaction price in August 2014 is $29,300, a record high for the month, and an increase of more than $400 over August 2013's average of $28,898. The forecast predicts that total light-vehicle sales in August 2014 will surpass July sales by more than 60,000 units. Following several months of lower-than-expected fleet volume, fleet sales in August are expected to reach 162,000 units, which represents 11% of total light-vehicle sales, which is consistent with the level a year ago.
For all of calendar 2014, LMC Automotive predicts total U.S. auto sales will hit 13.5 million retail units and 16.3 million total units, including fleet sales--both increases of 5% over 2013 levels.
"As a very robust summer selling season winds down, optimism continues in the auto industry for the remainder of 2014, with expectations of economic growth beginning to catch up to the growth in autos," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "As we look at scenarios for 2015 light-vehicle sales, external factors, including global conflicts and capital flight from emerging markets, account for the majority of the risk to further and expected growth in the United States."