The robust pace of auto sales during July in the U.S. market has continued through the first half of August, according to a monthly sales forecast update from J.D. Power and strategic partner LMC Automotive.
August new-vehicle sales may reach the highest level in seven years—since before the Great Recession (December 2007-June 2009). Additionally, J.D. Power anticipates that consumer spending on new vehicles in August will be close to $36 billion, which would be the highest level on record.
Retail new-vehicle deliveries are set to reach 1.27 million units for the month, which is up 12% from August 2012, based on analysis of retail transaction data during the first 15 selling days of the month.* This translates to a seasonally adjusted annual selling rate (SAAR) of 13.1 million units, which means that this would be the third straight month that the retail SAAR has averaged above 13.0 million units. In comparison, the retail SAAR in August 2012 was 12.6 million units.
Total (retail and fleet) light-vehicle sales in the month also are projected to climb 12% from 1.28 million unit sales a year ago to nearly 1.5 million unit sales this year, which translates to a much stronger 16.0 million-unit SAAR vs. 14.5 million units a year ago. Actual unit sales would be the highest since May 2007 and the SAAR would be the highest since November 2007. In August, fleet deliveries to rental car companies and corporations likely will account for 15% of the sales mix with volume of 225,000 units.
Our forecast signals that August may be the best month for retail deliveries in the past seven years. It’s encouraging to see that this strong selling environment is occurring when consumers are spending more on new vehicles than in any month on record, which is a further indication of the underlying strength of the industry.
The higher sales pace confirms a welcome stage of stability, according to Jeff Schuster, senior vice president at our partner LMC Automotive, who notes that the sales pace in September likely will be lower as Labor Day weekend deliveries are counted with August totals. He also said that LMC Automotive is maintaining its calendar 2013 outlook of 12.8 million retail sales and 15.6 million total light-vehicle sales.—John Humphrey, senior vice president of the global automotive practice at J.D. Power
*The percentage of change in sales is selling-day adjusted. There are 28 selling days in August 2013 vs. 27 days in August 2012.