For the second time in three months and the sixth time this year, new vehicle retail sales in November are expected to slip from year-ago levels, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

U.S. new vehicle retail sales in November are projected to reach 1,128,900 units, a 2.0% decrease from November 2015 on a selling-day adjusted basis, while total new-vehicle sales are expected to drop 3.4% to 1,381,800.

While the presidential election had the potential to disrupt vehicle sales in the first half of the month, in reality, the impact was minimal. This is consistent with past elections when a small suppression of sales during the election was offset by gains post-election.

Full-month performance will be heavily influenced by sales during the Thanksgiving weekend, which is one of the busiest selling periods of the year and is expected to account for one-fourth of November sales. A key driver of vehicle demand during the Thanksgiving weekend is the availability of year-end incentive programs, which improve vehicle affordability. Incentive spending thus far in November is $3,886 per unit, up 15% from $3,374 in November 2015 and the second-highest level ever behind the record $3,939 set in September. 

Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power, said: "The election had a minimal effect on vehicle sales. While sales volume was suppressed for a short period during the election, the declines were quickly recouped by the end of the election week. Although we are forecasting another decline in retail sales, it is important to note that in absolute terms vehicle sales remain close to record levels while transaction prices are at record highs. However, these results are being driven in part by elevated incentive levels, which represent a meaningful risk to the long-term health of the auto industry."

Total vehicle sales in the US are forecast at 1,316,604 units for the month, some 3.4% lower than last year's pace.

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: "The level of uncertainty in the market is high, but thus far the financial markets have shrugged off adverse policy risk related to trade and immigration under President-elect Trump and are expecting a fiscal stimulus boost that could spill over to autos. Stimulus watch, combined with the likelihood that incentives have pulled forward retail demand and will push 2016 to a near-record level, is making 2017 a pivotal year directionally for auto sales. The economy and industry could be facing a boom or bust depending on which policies are focused on and implemented."

LMC Automotive's forecast for full-year total light-vehicle sales is 17.4 million units, but has increased slightly and now is on the cusp of topping 2015 by 10,000 units. The forecast for retail light-vehicle sales has increased slightly to 14.1 million units from the previous projection of 14.0 million units but down 1.5% from 2015.

LMC is forecasting 17.4 million units for total light-vehicle sales in 2017, with retail light-vehicle sales expected to be down for a second year, to 14.0 million units.

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