August New-Vehicle Sales Expected to Increase over August 2017
ATLANTA, Aug. 28, 2018 /PRNewswire/ -- New-vehicle sales in August are forecast to reach 1.49 million, up approximately 100,000 units from August 2017 according to a sales forecast from Cox Automotive released today. The seasonally adjusted annual rate (SAAR) of 16.8 million units forecast for August is up incrementally from last month's 16.7 million and up from the sales rate of 16.5 million in August 2017.
"The market remains strong and all the talk of higher interest rates and trade tariffs is not chasing away buyers," noted Charlie Chesbrough, senior economist at Cox Automotive. "However, we are still forecasting a slowing sales pace over the remaining months of the year as buying conditions slowly deteriorate due mostly to higher interest rates and continued high gasoline prices."
Year-over-year comparisons for August will be difficult to make. Sales during the final week of August 2017 were disrupted by Hurricane Harvey's impact in Southeast Texas, specifically in Houston, the fourth most populated city in the U.S. While the number of selling days is identical at 27, the disruption in sales due to the Category 4 hurricane of last year likely drove August 2017 total sales downward, although the exact number is unknown. If large year-over-year gains occur in August 2018, a low base from August 2017 would likely be a contributing factor.
The 16.8 million SAAR forecast for August is below the 17.1 million rate the market has been averaging so far this year. Buying conditions continue to worsen due to higher interest rates and gas prices remain elevated, hitting consumers' pocketbooks. Another contributing factor to weakening sales may be trade policy. Steel and aluminum tariffs have been in place for a number of months now, driving production costs higher and negatively impacting profit margins. With less margin available, automakers are demonstrating more incentive restraint. Days-supply is also relatively stable, driving further incentive discipline.
Cox Automotive's forecast for full-year sales in 2018 is 16.8 million vehicles, down slightly from the 17.1 million sold in 2017.
The all-time record for August sales was set in 2002 when the sales pace reached 18.1 million thanks in part to aggressive incentive programs that were still in place following the 9/11 attacks on the United States. The record volume for August of 1.71 million was also reached that same year.
Although the August sales pace is forecast to improve over July, sales are expected to moderate over the rest of the year. Higher interest rates are not conducive to vehicle buying. When coupled with higher vehicle prices, a gradual decline in affordability slows the market. In addition, off-lease used-vehicle volume continues to grow. These mostly-three-year-old vehicles, selling at a 30-to-50 percent discount to new, are a threat to new-vehicle sales volume.
Key Highlights for the August 2018 Sales Forecast:
-- New light-vehicle sales, including fleet, are expected to reach
1,490,000 units, up nearly 1.0 percent compared to August 2017 and
nearly 10 percent from July 2018.
-- The August 2018 SAAR forecast of 16.8 million is up over the 16.5
million pace (recently revised up from 16.0 million) in August 2017 and
up modestly from last month's 16.7 million pace.
-- Talk of tariffs and higher interest rates may be having some pull-ahead
impact in the market. Auto buyers, concerned about the increasing
likelihood of higher vehicle prices over the course of the year, may be
buying sooner than they had originally planned, supporting a higher
sales pace.
-- Although general buying conditions are strong, risks are also rising.
Additional interest rate hikes are expected later this year and a strong
supply of off-lease vehicles is serving as a viable alternative to new.
Ford and General Motors Forecast to Decline
Although the market is expected to come in higher compared to year-ago levels, not all manufacturers will show an increase. Jeep is expected to continue to perform well as demand for rugged crossovers fits well with their portfolio. Ford and GM, however, are likely to see declines as aging product in some segments and tighter inventory hold them back.
Sales Forecast(1) Market Share
---------------- ------------
Aug-18 Aug-17 Jul-18 YOY% MOM% Aug-18 Aug-17 Jul-18 MOM
------ ------ ------ ------ ---
GM 255,000 275,552 222,000(2) -7.5% 14.9% 17.1% 18.6% 16.4%(2) 0.7%(2)
Ford Motor Co 202,000 209,029 192,743 -3.4% 4.8% 13.6% 14.1% 14.2% -0.7%
Toyota Motor Co 230,000 227,625 208,770 1.0% 10.2% 15.4% 15.4% 15.4% 0.0%
Fiat Chrysler 195,000 176,033 170,970 10.8% 14.1% 13.1% 11.9% 12.6% 0.5%
American Honda 145,000 146,015 138,602 -0.7% 4.6% 9.7% 9.9% 10.2% -0.5%
Nissan NA 115,000 108,326 108,792 6.2% 5.7% 7.7% 7.3% 8.0% -0.3%
Hyundai Kia 111,000 107,633 104,864 3.1% 5.9% 7.4% 7.3% 7.7% -0.3%
VW 59,000 56,535 53,761 4.4% 9.7% 4.0% 3.8% 4.0% 0.0%
Subaru 63,000 63,215 59,426 -0.3% 6.0% 4.2% 4.3% 4.4% -0.2%
------ ------ ------ ------ ---- --- --- --- --- ----
Grand Total(3) 1,490,000 1,478,572 1,356,593 0.8% 9.8%
------------- --------- --------- --------- --- ---
1 August 2018 Cox Automotive Industry Insights Forecast; all historical data from OEM sales
announcements
(2) GM monthly results are Cox Automotive Estimates
3 Total includes brands not shown
Most vehicle segments should see month-over-month gains, although car segments are expected to see significant, and continued, declines. Compact crossovers are forecast to continue to post strong year-over-year gains, while pickups are expected to sell well thanks to incentives on older models and interest in new models from GM and FCA.
Sales Forecast(1) Market Share
---------------- ------------
Segment Aug-18 Aug-17 Jul-18 YOY MOM Aug-18 Aug-17 Jul-18 MOM
------- ------ --- --- ------ ------ ------ ---
Mid-Size Car 130,000 154,091 118,726 -15.6% 9.5% 8.7% 10.4% 8.8% 0.0%
Compact Car 160,000 185,261 145,778 -13.6% 9.8% 10.7% 12.5% 10.7% 0.0%
Compact SUV/Crossover 285,000 248,274 254,422 14.8% 12.0% 19.1% 16.8% 18.8% 0.4%
Full-Size Pickup Truck 205,000 200,158 187,602 2.4% 9.3% 13.8% 13.5% 13.8% -0.1%
Mid-Size SUV/Crossover 220,000 200,628 212,788 9.7% 3.4% 14.8% 13.6% 15.7% -0.9%
---------------------- ------- ------- ------- --- --- ---- ---- ---- ----
Grand Total(2) 1,490,000 1,478,572 1,356,593 0.8% 9.8%
------------- --------- --------- --------- --- ---
1 Cox Automotive Industry Insights data
(2) Total includes segments not shown
All percentages are based on raw volume, not daily selling rate.
Additional Insights from the Cox Automotive team
Cox Automotive will host its monthly automotive sales day call on Tuesday, September 4, at 11 a.m. EDT. Chesbrough and Michelle Krebs, executive analyst from Autotrader, will provide an economic overview, share industry trends and answer questions.
To discuss any automotive-related topic with a Cox Automotive analyst, contact a member of the Public Relations team to schedule an interview.
About Cox Automotive
Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader(®), Clutch Technologies, Dealer.com(®), Dealertrack(®), Kelley Blue Book(®), Manheim(®), NextGear Capital(®), VinSolutions(®), vAuto(®) and Xtime(®),( )are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com
View original content:http://www.prnewswire.com/news-releases/august-new-vehicle-sales-expected-to-increase-over-august-2017-300703571.html
SOURCE Cox Automotive
