View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
July 29, 2020updated 16 Jun 2021 2:36pm

Low stock, economic uncertainty, hold back July US sales – Cox

The US light vehicle market is expected to show modest month over month improvement in July but the growing number of COVID-19 cases and overall economic uncertainty continue to stifle a more robust recovery.

By Olly Wehring

  • Annual vehicle sales pace in July forecast to be 13.3m, down from 16.9m in 2019
  • Sales volume expected to fall 19% year on year, finish near 1,130,000 units
  • Industry recovery slow but on track with third straight month of improvement

The US light vehicle market is expected to show modest month over month improvement in July but the growing number of COVID-19 cases and overall economic uncertainty continue to stifle a more robust recovery.

According to Cox Automotive, the seasonally adjusted annual rate (SAAR) of auto sales in July is expected to be 13.3m, up from last month’s 13m pace but down from last year’s 16.9m.

Sales volume in July, forecast at 1.13m units, will be down 19% from July 2019.

According to Charlie Chesbrough, senior economist at Cox Automotive, “The market has been making slow but steady gains since April’s low, but there are many headwinds hampering our recovery.”

Consumer sentiment for the most part drifted downward throughout the month of July as surges in COVID-19 cases in the south and the west dominated news headlines.

Concerns over high unemployment, a troubled US economy and the resulting severe recession also weighed heavily on potential auto buyers, keeping many out of the market.

Shoppers who stayed in market were likely impacted by a limited supply of product at dealerships, as tight inventory has become a growing problem for both new and used vehicles.

Inventory key metric in July

Based on analysis of vAuto Available Inventory data, there was only 67 days of inventory available in mid-July based on the current sales pace – far below the July 2019 level of 86 days.

Lean supply can be a positive for dealers and automakers as it often leads to less aggressive incentive spending and high grosses. However, low inventory will also drive down market volume, as vehicle shoppers may not find the product they want. Many will decide to wait rather than compromise on colour or trim package.

Not all automakers were in the same inventory situation in July though, and certainly inventory issues are impacting products and locations differently.

Toyota and Subaru had the tightest inventory among larger brands in July, both below 40 days of supply. At the other end of the scale, Chrysler, Dodge and Ford all had days of supply above 90 days in July. Mitsubishi had the most inventory on hand in July, with 135 days of supply. Among luxury brands, Lexus in July had the tightest situation at nearly 41 days of supply while Buick and Jaguar were near 130 days.

Inventory levels also varied greatly across the country during the month, as the COVID-19 pandemic impacted states and regions differently. Some parts of the country registered plenty of inventory while other regions had very limited supply. Among the largest metro markets, New York dealt with the tightest supply situation in July with only 54 days of inventory at mid-month. Many markets in the south, on the other hand, had more than enough inventory, with Dallas-Fort Worth at 72 days and Houston at 85 days. In Corpus Christi, Texas, available inventory stood near 100 days’ supply.

July 2020 Sales Forecast Highlights

  • In July, new light vehicle sales are forecast to fall to 1.13m units, down nearly 19% versus July 2019. Compared to June, sales are expected to rise nearly 27,000, or nearly 2%.
  • The SAAR in July 2020 is estimated to be 13.3m, far below last year’s 16.9m level, but an improvement from last month’s 13m pace.
  • There are 26 selling days in July 2020, one more than July 2019.

COVID-19 hit US light vehicle sales hard in Q2

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to Just Auto