New-vehicle sales, including fleet, should decline 6% from a year ago to 1.35 million units in October, Kelley Blue (KBB) said today. If realized, the used-vehicle information site’s prediction would put the month’s seasonally adjusted annual rate (SAAR) at 17.9 million, down from 18 million one year ago but up from September’s 17.7 million SAAR.
Looking ahead, the firm put U.S. sales for all of 2016 at between 17.3 and 17.6 million, which could either be a 1% decrease or increase from last year’s record performance.
“Kelley Blue Book expects October 2016 sales to come in at a robust 17.9 million SAAR; however, due to fewer selling days and an extremely strong October 2015, there will be volume declines across the industry,” said KBB analyst Tim Fleming. “Higher incentives are helping to boost sales, but with transaction prices at an all-time high and great consumer demand for SUVs and trucks, which are more profitable, automakers can afford the extra incentives. Still, discipline with incentives and moderating products will go a long way in preserving residual values in the next few years.”
The firm’s 1.36 million-unit prediction for October includes fleet sales, with retail sales expected to account for 82.5% of this month’s volume. That’s down from 83.3% in October 2015.
Subaru of America continues to shine bright, although KBB analysts expect the automaker’s sales totals to be flat from a year ago due to two fewer selling days in October. It added that despite Subaru’s streak of 58 consecutive months might be in jeopardy, the OEM has the fastest-selling inventory, lowest days’ supply, and the least incentives of any major brand. The story, however, is different for Volkswagen.
“Now, more than one year removed from the announcement of the company’s diesel scandal, Volkswagen is still losing market share in the United States, and Kelley Blue Book expects volume declines to approach 10% in October 2016,” said Fleming. “Upcoming SUV launches, including the redesigned Tiguan and an all-new three-row SUV, will certainly help Volkswagen’s car-dominant lineup once they hit the market, and that can’t come soon enough for Volkswagen dealers.
“Importantly, the Audi and Porsche brands have not been affected by the scandal, as sales for those two brands are up year-over-year,” he added.
By category, the mid-size car segment should to continue its freefall in October, with the firm expecting sales of mid-size cars to drop 1.5% from a year ago. Only two models in the segment have increased sales this year (Chevrolet Malibu and Subaru Legacy), despite increased incentive spending. As a whole, cars should capture 37% of the market this month, which down from a 40% share in October 2015.
And for the very first time, Kelley Blue Book said SUV sales should top car sales — a trend that should continue with moderate gas prices.