New-vehicle retail sales in September are expected to fall from a year ago, according to a forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to exceed 1 million units, a 15.2% decrease compared with September 2018.
However, this year's Labor Day weekend was credited to August for reporting purposes. Controlling for one fewer weekend, this translates to a year-over-year decline of 7.8%.
New-vehicle retail sales in Q3 are projected to reach 3.62 million, flat compared to Q3 2018. In contrast, new-vehicle retail sales in the first half of the year were down 2.9%. The seasonally adjusted annualized rate for total sales is now expected to be 16.8 million units, down 500,000 units from a year ago.
“After delivering record sales results in August, when retail sales rose 6.2% on a selling day-adjusted basis, the decline in September sales was expected and reflects a quirk in how the industry reports sales,” said Thomas King, senior vice president of the Data and Analytics Division at J.D. Power. “The large decline in sales this month is driven primarily by the timing of the Labor Day holiday. … With close to 250,000 new vehicles sold during the holiday weekend, the exclusion from September reporting is significant.”
King noted that “noise” in the monthly results mean it makes sense to evaluate performance over the entire quarter. Retail sales in Q3 are expected to be flat compared with the same time period last year. This is a “remarkable” improvement from the first half of the year and the first quarter in nearly two years without a year-over-year sales decline, King said.
The improvement, however, has been accompanied by record levels of spending. Incentive spending is projected to reach $4,159 (up 6% or $246), the highest level ever for the third quarter and just $28 short of the all-time quarter high set in Q4 2017. The increase is being driven by the ongoing sell-down of old model-year vehicles which account for more than 90% of sales in the quarter and represents the slowest sell-down on record.
Finally, transaction prices are expected to set another record for the quarter, with the average new-vehicle sales price projected to reach $33,321, up $1,229 (4%) from last year. The average price for cars is up 4% to $26,736; light trucks and SUVs are up 3% to $35,725.
Originally posted on Automotive Fleet