With automakers in the US due to start announcing their August 2014 sales this week, three forecasters have predicted sales from just under to just over 1.5m units and SAAR of 16.5m to 16.6m.
Cars.com reckons August light new vehicle sales will reach 1,503,640 units, up 0.2% year on year and 4.8% from July. A SAAR of 16.6m is expected for the month, up 4.1% from August 2013 and 0.7% month-on month.
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Retail sales are expected to make up 87% of August sales, up 2.0% year on year.
“Summer clearance discounts on outgoing 2014 model year vehicles and the arrival of new 2015 selections helped propel August sales to their highest levels in nine years,” said Cars.com chief analyst Jesse Toprak.
“We expect sales to continue at a healthy pace through the end of the year, finishing out 2014 with 16.3m total new car units.”
TrueCar also forecast a SAAR of 16.6m in August and said automakers would have spent US$2,772 a vehicle in incentives, down 2% from July.
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By GlobalDataIt kept its full year forecast at 16.4m and predicted August volume of 1,501,000 units (despite one less selling day), resulting in a 3.7% daily selling rate (DSR) increase.
That estimated average incentive spend of $2,772 per vehicle would be up 9.3% year on year, TrueCar said, up 2% from July 2014.
“Year over year incentive spending increases are offset by higher transaction prices as consumer demand shifts from lower-margin cars to higher-margin trucks and crossovers, TrueCar said. “Registration mix [is] expected to be 88.1% retail and 11.9% fleet for the month, compared to 90.0% retail, and 10.0% fleet last August.
“While we continue to keep close tabs on inventories and incentives, we remain upbeat about auto industry sales, segment mix and profitability,” said TrueCar president John Krafcik.
“Despite one fewer selling day, sales are tracking to match last year’s epic August while incentive spending changes reflect consumer demand shifting to higher-MSRP, higher-profit vehicle segments, which is a net positive for most full-line automakers.”
Meanwhile, Kelley Blue Book (KBB) called August a 0.7% year on year fall to 1.49m units and 16.5m SAAR.
“Although sales are down from a raw volume perspective, they remain up slightly after adjusting for the difference in selling days in August 2014 versus August 2013,” KBB said.
“Although growth has slowed, sales remain steady and on pace to end the year strong,” said senior analyst Alec Gutierrez.
“Growth is expected to continue to soften, so we wouldn’t be surprised to see automakers increase their incentive spending. Spending was restrained for the first part of the year, and has crawled upward in recent months. Sales also will be boosted by the Labor Day weekend [which concludes today, 1 September – ed], which is traditionally one of the strongest weekends of the year for vehicle sales.”
Retail sales are expected to account for 89% of volume in August, KBB added.
KBB noted that the Chrysler group had continued “its impressive run in 2014 with double-digit growth in August. The Jeep brand has been especially strong, becoming Chrysler Group’s highest selling and the industry’s fastest growing brand. Much of Jeep’s success is due to the Cherokee, which launched late last year. Due to one fewer selling day this year, [we anticipate] most of the major manufacturers to remain flat or post minimal declines year over year”.
The analyst added that both compact and mid-size SUVs/crossovers continued to be the strongest vehicle categories in the US in August. This year, compact and mid-size SUVs/crossovers are responsible for nearly 60% of the industry’s growth, as two of the fastest selling segments. Compact SUVs/crossovers average 49 days to turn, while mid-size SUVs/crossovers average 61 days, both just slightly higher than this time last year.
“The mid-size car segment continues to lose steam this year,” Gutierrez added. “Sales on the year are down 2%, average transaction prices are down 1%, while incentive spending is up nearly $500 per unit.
“Recently redesigned models such as the Hyundai Sonata and Chrysler 200 will face challenges in this highly competitive segment.”
