Cox Automotive Forecast: U.S. Auto Sales Pace Expected to Fall from June Level

- Annual sales pace expected to fall to 16.6 million in July, down from June's 17.3 million level.

- July sales volume is expected to rise just slightly from July 2018, up 0.5%.

- The market's return to volatility is expected after relative stability in May and June.

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Jul 26, 2019, 14:00 ET

ATLANTA, July 26, 2019 /PRNewswire/ -- Cox Automotive is forecasting July U.S. auto sales volume to finish at 1.38 million, rising 0.5% from last year, or about 7,000 units. The seasonally adjusted annual rate (SAAR) is expected to drop to 16.6 million, below June's 17.3 million level, and down slightly from July 2018's 16.7 million pace. July 2019 has 25 selling days, one more than last July, which causes the SAAR to fall significantly even though sales volume rises.

"Strong consumer confidence and employment gains are supporting stable demand for light vehicles," said Charlie Chesbrough, senior economist, Cox Automotive. "However, affordability issues continue to weigh on the market. The estimated average transaction price for a new light vehicle in the U.S. is $37,285 in the most recent Kelley Blue Book report, and we do not see this number coming down."

In total, vehicle sales in the first half of 2019 were down 2.2%, or nearly 200,000 units. Fleet sales, both commercial and rental, have been the key to supporting the new-vehicle market in the first half. They are likely to remain strong through the year. Retail purchasing and leasing activity was down in the first half of this year, extending the trend from 2018, as consumer activity slows due to affordability concerns.

Market Volatility Remains a Challenge
Volatility has been as issue in the market in 2019 as the SAAR has shown large swings over various months. Some of these swings can be attributed to the harsh winter in much of the country. However, the largest variable continues to be fleet volume. Sales of both commercial and rental fleet vehicles have been on the rise due in part to increased depreciation allowances for business-use vehicles. The market has seen increased fleet activity and business-use vehicle purchases, and this trend is likely to extend into 2020.

July 2019 Sales Forecast Highlights

In July, new light-vehicle sales, including fleet, are forecast to reach 1.38 million units, up 0.5% or 7,000 units, from July 2018. However, versus June 2019's strong performance, sales are expected to fall more than 9%, or more than 140,000 vehicles.
The SAAR in July 2019 is estimated to be 16.6 million, down from last month's surprisingly strong 17.3 million level and down slightly from last year's 16.7 million pace. This July has 25 selling days, one more than last July, which is contributing to the relatively weak SAAR estimate given an increase in sales volume.
Record volume for July occurred in 2005 when sales reached 1.8 million vehicles and a SAAR of 20.6 million. The record occurred during the summer of "no haggle" incentive programs when employee pricing for all buyers was widespread. Even with the volume of unique incentive programs running high all year, it is unlikely that new records will be reached this month.

July 2019 Forecast

		Sales Forecast¹					Market Share
		Jul-19	Jul-18	Jun-19	YOY%	MOM%	Jul-19	Jun-19	MOM
GM		225,000	218,500*	253,000*	3.0%	-11.2%*	16.3%	16.7%*	-0.4%*
Ford Motor Co		190,000	192,743	218,000*	-1.4%	-13.1%*	13.8%	14.4%*	-0.6%*
Toyota Motor Co		205,000	208,770	202,352	-1.8%	1.3%	14.9%	13.3%	1.6%
FCA Group		170,000	170,970	206,083	-0.6%	-17.5%	12.3%	13.5%	-1.2%
American Honda		135,000	138,602	135,901	-2.6%	-0.7%	9.8%	8.9%	0.9%
Nissan NA		110,000	108,792	123,504	1.1%	-10.9%	8.0%	8.1%	-0.1%
Hyundai Kia		110,000	104,864	122,507	4.9%	-10.2%	8.0%	8.1%	-0.1%
VW		55,000	53,761	56,339	2.3%	-2.4%	4.0%	3.7%	0.3%
Subaru		61,000	59,426	61,512	2.6%	-0.8%	4.4%	4.0%	0.4%
Grand Total²		1,380,000	1,373,368	1,521,711	0.5%	-9.3%
	¹ July 2019 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements
	² Total includes brands not shown * GM and Ford monthly sales are estimated

	Sales Forecast¹					Market Share
Segment	Jul-19	Jul-18	Jun-19	YOY%	MOM%	Jul-19	Jun-19	MOM
Mid-Size Car	112,000	118,726	123,037	-5.7%	-9.0%	8.1%	8.1%	0.0%
Compact Car	130,000	144,269	142,778	-9.9%	-8.9%	9.4%	9.4%	0.0%
Compact SUV/Crossover	240,000	254,422	255,705	-5.7%	-6.1%	17.4%	16.8%	0.6%
Full-Size Pickup Truck	200,000	187,602	227,748	6.6%	-12.2%	14.5%	15.0%	-0.5%
Mid-Size SUV/Crossover	220,000	212,788	229,583	3.4%	-4.2%	15.9%	15.1%	0.9%
Grand Total²	1,380,000	1,373,368	1,521,711	0.5%	-9.3%

¹Cox Automotive Industry Insights data

² Total includes segments not shown

All percentages are based on raw volume, not daily selling rate.

About Cox Automotive
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