Courtesy of Subaru.

Courtesy of Subaru. 

Kelly Blue Book expects 1.43 million new vehicles will be sold in July, which is 6% less than the same time last year.  The forecast would put the seasonally adjusted annual rate at 16.7 million for the fifth month in a row with a new-vehicle SAAR below 17 million.

"The annual selling pace is expected to remain below 17 million SAAR in July with volume dipping slightly from the levels seen in May and June 2017," said Tim Fleming, analyst for KBB. "Kelley Blue Book expects to see sales start to jump back up again in August and September thanks to model-year closeouts and the Labor Day holiday."

These lower sales numbers come after a record year for car sales in 2016, which culminated in 17.5 million new vehicles sold by the end of the year. Prior to 2016’s record, the new-vehicle industry had experienced six years of consecutive year-over-year sales increases. KBB’s forecast for 2017 is sales in the range of 16.8 million to 17.3 million units.

Fleet sales are also expected to represent a smaller percentage of overall new-vehicle sales in the month, as more sales are expected to originate from retail sources. Retail sales are expected to account for 84.1% in July, up 0.5% from the same time last year.

General Motors is expected to see the biggest drop in market share as it focuses on lowering its production to address rising inventory, according to KBB. This drop in production is expected to curb the increased incentives needed to move slower-selling models that have grown in supply, the firm added.

The only brand expected to see a year-over-year rise in sales volume during July is Subaru, according to KBB. Subaru is expected to grow unit sales by 3.7%, year-over-year, thanks to the popularity of its Crosstrek and Outback SUVs and Impreza compact car.

Compact SUVs are expected to see the highest gains in market share during the month. Meanwhile, mid-size cars are expected to post the highest drop in market share in July.