The US light vehicle market is continuing to slow this month, according to analysts at JD Power and LMC Automotive.
The new vehicle retail sales pace in June is expected to be lowest for the month since 2012, according to a forecast developed jointly by the two firms.
Retail sales in June are forecast to reach 1,168,400 units, a 1.3% decrease compared with June 2016. The seasonally adjusted annualized rate (SAAR) for retail sales is expected to be 13.1m units, a decrease of 51,000 units from a year ago. Retail sales through the first half of 2017 are projected to be down 1% from last year.
“The auto industry is pacing towards its weakest first half since 2014,” said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power. “While the retail selling rate has declined in four of the first six months, the broader concern remains the negative health indicators behind the sales results.”
Total incentive spending in the marketplace has risen to a record USD25.2bn through June, up 11.7% from last year. On a per unit basis, spending for the average new vehicle through June was USD3,770, up USD416 from a year ago. On trucks and SUVs, spending was USD3,645 up USD484, while on cars, spending was USD3,983 up USD345.
Total vehicle sales for the month are forecast at 1,478,300 units, some 2.3% down on last year and with a SAAR of 16.5m units (for comparison, the market in 2016 turned out at 17.4m).
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said fleet volumes are lower.
“As the US auto market enters the fourth month in a row of a sub-17 million unit selling rate, nerves are being tested,” he said.
“The primary driver of the decline in the total sales pace is a pullback in fleet volume, which are projected to be down 8% for the first half of 2017, while retail sales, assisted by elevated incentives, are projected to contract by 0.6% for the same period. It will be challenging in the second half of the year to keep pace with 2016, so some additional weakness and further risk are expected in both fleet and retail volume, but a year still expected above 17m units should not be considered a poor performance.”