Analysts at Cox Automotive say that they forecast the US light vehicle market annual sales pace in September at near 15.5 million units, the fifth consecutive month of improvement.
Cox also forecasts sales volume in September at close to 1.275 million units, close to year-ago levels.
Further, they says inventory levels continue to slip lower in conditions of strong demand, with only 3% of available inventory being model year 2021, far below normal levels.
The seasonally adjusted annual rate (SAAR) for September is likely to reach 15.5 million, a modest improvement over August’s 15.2 million with overall sales volume expected to be down just 0.3% compared to year-ago levels. However, Cox also points out that September 2020 had two additional selling days and a Labor Day weekend compared to September 2019, so a relatively strong year-over-year volume comparison was expected.
Cox also says new vehicle sales are performing well considering the historically low inventory levels. According to Charlie Chesbrough, senior economist at Cox Automotive: “Available Inventory is far below last year’s levels, yet sales continue to show surprising strength. Going into the fourth quarter, the key question is: Can this continue? Clearly new vehicle buyers haven’t been hit as hard as other consumers during this recession, so demand is likely to remain stable over the near-term.”
Closing out the third quarter, year-to-date US auto sales volume is forecast to be down 19.6%. Retail sales are holding up relatively well compared to lease; fleet activity – rental, commercial and government – remains depressed.
One potential issue for the fourth quarter is lack of new product due to the model year roll-over delay. There are only a handful of model year 2021 vehicles in the marketplace right now, and vehicle buyers may be surprised when they go shopping this fall for the latest and greatest products. Currently, only 3% of available inventory is model year 2021. At this point last year, 25% of dealer supply was model year 2020. Factory shutdowns have delayed many products and limited availability of others. This headwind is likely to increase through at least the remainder of the year.