J.D. Power forecasts drop in September new-car sales
(September 28, 2016) DETROIT — For the fifth time in the past seven months, U.S. new-vehicle retail sales are expected to drop in September, falling 1.4% from a year ago, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are on pace to reach 1,185,500 units in September, while total sales are projected to fall 0.8% to 1,429,100.
Labor Day weekend is typically one of the highest volume sales weekends in the year. The weekend’s sales this September were 199,493 units, a 1% decrease compared with 2015. This decline was despite elevated incentive programs from manufacturers. In fact, incentive spending thus far in September is at a record level of $3,923 per unit, surpassing the previous high of $3,753 set in December 2008.
Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power, said: “The industry can be viewed through two competing perspectives. The first is that in absolute terms, the industry is performing at an exceptional level. While sales have fallen slightly, they are at near-record levels and transaction prices are at all-time highs. The second is less positive. With the rate of growth slowing, leading indicators are pointing to challenges ahead. Specifically in September, incentive spending is at an all-time high."
Retail sales year to date through September are expected to be down 1.3%, compared with the same period in 2015, while total sales are expected to be up 0.5%.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “The U.S. automotive market continues to show signs of little growth, yet in our opinion the numbers do not reflect a significant weakness or risk. The expectation remains for steady volume levels at the topline, despite a pullback in the retail market and increased monthly performance volatility. However, group and brand performance is beginning to diverge as competitive pressure is at an all-time high.”