Trucks Bolster October New-Auto Sales Despite Ebb in Market
In October, new-truck and -SUV sales will set a high mark for any month in the U.S. market, accounting for 62.2% of the month’s retail deliveries, according to a mid-month sales update from J.D. Power and auto forecasting partner LMC Automotive.
Based on sales data collected during the first two weeks of the month, total deliveries are anticipated to trail last October by 0.2%, when adjusted for two fewer selling days (26 selling days in October 2016 vs. 28 in October 2015). Total (retail and fleet) sales may reach 1.35 million units vs. 1.45 million units in the same month of 2015. The month’s retail deliveries are projected to total 1.1 million units, off 0.8% from last October’s 1.19 million units, while fleet sales are set to decline but will rise 2.7% when selling-day adjusted to make up 18.4% of the total mix.
October will be the sixth of eight months in 2016 of year-over-year retail sales dips. Although modest, these declines are an indicator that deliveries may have peaked, according to John Humphrey, senior vice president of the global automotive practice at J.D. Power, who adds, “We do not foresee a large pullback in sales in the near term, but the fact that retail sales are beginning to contract, despite high incentives and extremely low interest rates and gas prices, is a clear indicator that this cycle has reached its peak.”
Jeff Schuster, senior vice president of forecasting at LMC Automotive, also provides a more measured outlook, noting that sales are anticipated to remain near the all-time high, but are expected to shrink slightly this year as well as in 2017.
The mid-month forecast also reports that this year’s model-year transition is slower than a year ago, with 2017-model-year vehicles making up 37% of retail sales, which is less than a year ago when 40% of October retail deliveries were new 2016 model-year cars and light trucks.
Meanwhile, the average new-vehicle transaction price in October is $31,383, which sets another record, while incentive spending is below September 2016 but 12% higher than in October 2015.