New vehicle sales in August are projected to reach 1.3 million units, some 330,000 fewer than sold in August 2019. The seasonally adjusted annual rate (SAAR) of sales is expected to rise from 14.5 million in July to 14.9 million in August. Last year, the August SAAR was 17.1 million.
Auto industry research firm Cox Automotive reported the estimates on Wednesday, noting that the seasonally adjusted volume drop will be about 12%, well below the unadjusted sales figure. In 2019, August sales included two more sales days and the Labor Day holiday weekend.
Cox Automotive senior economist Charlie Chesbrough said that limited inventory, continuing high unemployment and low consumer confidence are still hampering a sales rebound. Automakers and dealers also have cut incentives and nearly 20% of dealers have raised retail prices.
While it may seem counterintuitive to raise prices when sales are low, the lack of inventory due to shutdowns at auto assembly lines means there are few choices available to consumers. The dealers that have raised prices are betting that buyers will pay up for a new vehicle in a time of shortage. Cox noted that about 20% of buyers have indicated that they will delay their purchase until pricing improves.
By segment, passenger cars fared the worst year over year. Sales of midsize cars are expected to drop by nearly 33%, while compact car sales fell by 31%. The best performing segment was full-size pickups, even though sales were down nearly 11% year over year.
Month over month, sales are forecast to rise in all segments, with compact car sales up the least, 0.9%, and compact SUV/crossover sales set to rise the most, 11.2%. August pickup sales are expected to rise by nearly 8%.
Compact SUV/crossover vehicles are forecast to show a market share increase to 17.7%, up 0.6 percentage points from July. Pickups and midsize cars are also expected to garner market shares of 0.1%, to 16.2% for pickups and 6.9% for midsize cars.
U.S. carmakers GM, Ford and Fiat Chrysler have seen shares tumble by 15% to 25% so far in 2020. That’s about half the size of the loss as of late March.
In the meantime, two U.S.-traded, China-based electric vehicle (EV) makers have seen share prices rise sharply. Shares of Nio Ltd. (NYSE: NIO) are up more than 400% as of Wednesday’s close, and Li Auto Inc. (NASDAQ: LI), which came public in late July, has seen its share price rise by 42% in less than a month.
A third China-based EV maker, Xpeng Inc. (NYSE: XPEV), has reportedly priced its Thursday IPO at $15 a share, above the expected range of $11 to $13, and increased the number of American depositary shares on offer from 85 million to around 100 million.