August Retail Sales Advance; Fleets Stronger than Expected

Dave Cutting

August light-vehicle retail sales in the US market were stronger than in the same month last year, however retail deliveries did decline from last month, according to analysis of Power Information Network® (PIN) retail transaction data. On a year-to-date basis, retail sales continued to provide the market’s strength with a 12.2% increase over last month. Fleet sales are up only 1.8% thus far this year.

Retail unit sales edged up 2.5% from August 2010, but were down 2.4% from July on a selling-day-adjusted basis. The retail seasonally adjusted annual selling pace (SAAR) was 9.6 million units last month, compared to 8.4 million units in August 2010. In addition, the retail sales pace was slightly ahead of the pace in July 2011, which was 9.5 million units. Fleet sales in August were 7.4% higher than a year ago—but averaged a 2.5 million-unit rate—which was still below the 2.99 million-unit pace in August 2010 and the 2.6 million-unit pace this year in July when selling-day adjusted.

Total car and light-truck (retail and fleet) sales in the US in August rose 3.4% from last year on a selling-day-adjusted basis.* (Unadjusted totals were up by nearly 8% from a year ago.) Total light-vehicle deliveries in August improved by a slight 1.2% from results in the previous month of July.

Leasing Penetration Up from August 2010

Analysis of our PIN retail transaction data in August indicates that the average retail transaction price (minus customer cash rebate) of a new vehicle was higher than a year ago and also slightly higher than in July 2011. Lease penetration was up by 1.7 percentage points from a year ago. In addition, new cars and light trucks remained on dealer lots a much shorter time before selling—the retail turn rate** in August averaged just 47 days, which was 10 days less than the 57 days in August 2010.

August was the fifth consecutive month that automakers sold more than 1 million (1.07 million) cars and light trucks in the US. Nearly 74,700 more new cars and light trucks were delivered in August 2011 than in August 2010. This year’s total light-vehicle selling pace translates to a 12.1 million-unit SAAR vs. a much weaker 11.4 million units in August 2010.

On a relatively positive note, even though the US auto industry is facing an economic slowdown, lower consumer sentiment, and still dealing with production setbacks due to natural disasters in Japan and on the East Coast of the US, deliveries in the first 8 months of 2011 were up by nearly 800,900 units from the same period last year. On a percentage basis, year-to-date sales in the US rose 9.9% from a year ago to 8.45 million units vs. 7.65 million units.—Dave Cutting, senior manager of North American Production Forecasting at J.D. Power and Associates

*All changes in sales are selling-day adjusted. August 2011 had 26 selling days and August 2010 had 25.

**The retail turn rate is the average number of days that new vehicles remain on dealer lots before being sold.

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