August may produce year’s first U.S. sales gain

on Aug27

The forecasts show Ford could be among the automakers losing market share in August. Photo credit: DAVID PHILLIPS

August could be the first positive month of 2017 for U.S. auto sales, breaking a streak of seven consecutive year-over-year declines.

Forecasts from LMC Automotive, Edmunds and Kelley Blue Book call for light-vehicle sales to rise about 1 percent from August 2016. That would be the first increase since December, though it’s more a reflection of August having one more selling day this year than an upward swing in demand.

“While any kind of sales lift after seven months of declines is encouraging, automakers still have a long road ahead to have a strong close to the year,” Jessica Caldwell, Edmunds’ executive director of industry analysis, said in a statement.

“It’s a small step in the right direction. Inventories are still high, but automakers haven’t been afraid to put cash on the hood this year, so we expect dealers will be aggressive with their Labor Day and model-year-end sales events to keep this momentum going.”

All three forecasts project a seasonally adjusted, annualized selling rate of 16.6 million, down from 17.2 million in August 2016. It would be the industry’s fourth month in a row with a SAAR of less than 17 million, the longest stretch below that threshold since September 2014 through February 2015.

Retail sales are expected to rise about 2 percent, LMC and KBB said. Contributing to that is a 4.3 percent increase in incentive spending, according to J.D. Power, which said the average incentive in the first 17 selling days of the month was an August record of $3,805.

Automakers are scheduled to report August sales on Friday, Sept. 1.

If the industry does manage an increase for August, it could follow that up with a strong September as automakers roll out big Labor Day deals early in the month. In 2016, more than 400,000 vehicles — about 3 percent of the year’s total retail tally — were sold during the Labor Day holiday period, according to J.D. Power data.

“Labor Day is one of the most heavily shopped periods of the year, as consumers take advantage of sales promotions that typically extend through the first week of September,” said Thomas King, vice president of J.D. Power’s PIN OEM operations, media and marketing, said in a statement.

For August, Toyota Motor Sales U.S.A., American Honda, General Motors and Volkswagen Group of America are projected by KBB and Edmunds to gain market share from a year ago. The forecasts show Ford Motor Co., Fiat Chrysler Automobiles and Hyundai-Kia all losing share, while Nissan North America’s share is expected to be unchanged.

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