Last August, Hurricanes Harvey and Irma swept through parts of Texas and Florida, putting pressure on August sales of new cars. No such weather event is in the cards for this year, and researchers at J.D. Power and LMC Automotive expect retail sales of new cars to rise by 1.3% year over year for the month.
Total vehicle sales are forecast to reach 1.496 million units of which 1.28 million are tagged as retail sales. In August 2017, retail sales totaled 1.264 million and total sales totaled 1.479 million.
On a seasonally adjusted annual rate (SAAR) basis, total annual sales are forecast at 16.8 million units, of which 13.4 million are forecast to be sold at retail.
Automaker spending on incentives are also expected to dip slightly. During the first three weeks of August, the average incentive on the purchase of a new vehicle was $3,744, down by $141 compared with August 2017. Spending on passenger cars has dropped $448, while spending on trucks and SUVs is up by just $22. Last year spending over the Labor Day holiday period rose by more than $200 compared to incentives at the start of the month.
Thomas King, J.D. Power senior vice president of the data and analytics division, said:
Another month with reduced spending is a positive indicator for the health of the industry, but the continued rise of truck incentives remains a concern. As the manufacturers look to clear out old model year inventory, considerable potential exists for spending to rise by the end of the month.
Jeff Schuster, president of LMC Automotive’s Americas operations and global vehicle forecasts, added:
The auto industry still faces a prolonged and elevated level of trade risk, but overall sales are holding steady. We no longer expect fleet sales to be ratcheted back in the second half, but we do see stronger competitive pressure on the volume brands fighting for share. The result is a total light vehicle market that we expect to eek [sic] out a very slight increase—0.1%—over 2017.
The average new-vehicle transaction price for the first three weeks of August was $31,836, an all-time high for the month, beating last year’s record of $31,269. Trucks account for 68% of new vehicle sales through August 19, the highest level ever for the month and the 26th consecutive month that truck sales have topped 60% of all sales.
American consumers are on track to spend $41.1 billion on new vehicles in August, up by $1.5 billion over last August.