Strong July Auto Sales Possibly Helped By Pull-Ahead Impact

Selling rate expected to reach 17.1 million units, up from July 2017, slightly down from June

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Jul 26, 2018, 14:00 ET

ATLANTA, July 26, 2018 /PRNewswire/ -- U.S. new-vehicle sales in July are expected to come in at 1.41 million units, mostly unchanged when compared to year-ago levels according to the forecast released today by Cox Automotive. However, with one less selling day this year, the seasonally adjusted annual rate (SAAR) for July would be 17.1 million, an increase from the 16.7 million sales rate posted in July 2017.

"The U.S. vehicle market remains strong and all the talk of higher interest rates and trade tariffs are not chasing away buyers," said Charles Chesbrough, senior economist at Cox Automotive. "In fact, the threat of higher prices on the horizon may be driving more shoppers to the showrooms now."

A July sales pace of 17.1 million would be down from last month's pace of 17.4 million. The modest month-over-month decline may be an early sign of a change in the market. Sales in the first half of 2018 were stronger than initially estimated and stronger than the first half of 2017. Cox Automotive continues to forecast the market to slow modestly in the second half of the year.

"Buying conditions will not be getting better in the second half," added Chesbrough. "Gasoline prices remain elevated, higher interest rates are having an impact on household budgets, and consumer confidence, while still very high, is lower than it was earlier this year. Further, auto manufacturers are demonstrating some pricing discipline as dealer inventories are at a manageable level."

Cox Automotive's full-year sales forecast for 2018 is 16.8 million, down slightly from 2017's 17.1 million volume.

July 2018 Sales Forecast Highlights:

New light-vehicle sales, including fleet, are expected to reach 1,410,000 units, unchanged compared to July 2017, but down nearly 130,000 units, or 8.6 percent, from June 2018.
The SAAR in July 2018 is forecast to be 17.1 million, up from last year's 16.7 million pace, but down from the previous month's 17.4 million level.
A record SAAR in July is unlikely. The July record was set in 2005 when the sales pace reached 20.6 million, thanks to aggressive "employee pricing for all" incentive programs. The volume record was also reached that same year – 1.8 million units. With the market showing no signs of massive incentives and promotions, achieving this level is unexpected.
Talk of tariffs, as well as the forecast for even higher interest rates, may be having some pull-ahead impact in the market. Auto buyers, concerned about the increasing likelihood of higher vehicle prices over the course of the year, may be buying sooner than originally planned, driving a higher-than-expected sales pace.

Strong Results Expected from GM and FCA's Jeep Brand
Cox Automotive is forecasting continued strong results for GM as the popularity of Equinox and Traverse lifts Chevrolet. Jeep is also expected to perform well as demand for rugged crossovers fits well with their portfolio. Ford and Toyota, conversely, are likely to see some declines as aging product in some segments holds them back.

	Sales Forecast¹					Market Share
	Jul-18	Jul-17	Jun-18	YOY	MOM	Jul-18	Jun-18	MOM	Jul-17
GM	238,000	226,107	255,000³	5.3%	-6.7%	16.9%	16.5%	0.3%	16.0%
Ford Motor Co	196,000	199,318	229,537	-1.7%	-14.6%	13.9%	14.9%	-1.0%	14.1%
Toyota Motor Co	200,000	222,057	209,602	-9.9%	-4.6%	14.2%	13.6%	0.6%	15.7%
FCA Group	175,000	161,477	202,264	8.4%	-13.5%	12.4%	13.1%	-0.7%	11.4%
American Honda	145,000	150,980	146,563	-4.0%	-1.1%	10.3%	9.5%	0.8%	10.7%
Nissan NA	120,000	128,295	145,096	-6.5%	-17.3%	8.5%	9.4%	-0.9%	9.1%
Hyundai Kia	108,000	110,466	120,623	-2.2%	-10.5%	7.7%	7.8%	-0.2%	7.8%
VW	53,000	49,816	53,304	6.4%	-0.6%	3.8%	3.5%	0.3%	3.5%
Subaru	56,000	55,703	59,841	0.5%	-6.4%	4.0%	3.9%	0.1%	3.9%
Total²	1,410,000	1,410,593	1,541,998	0.0%	-8.6%
^{¹July 2018 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements}² Total includes brands not shown ³ GM June volume estimated by Cox Automotive

Following a trend the market has witnessed all year, car segments are expected to see further declines as consumers continue to switch to crossovers. Compact crossovers are expected to continue to post strong year-over-year gains, while pickup trucks are forecast to sell well thanks in part to discounts on older models as new models from GM and FCA come to showrooms.

	Sales Forecast¹					Market Share
Segment	Jul-18	Jul-17	Jun-18	YOY	MOM	Jul-18	Jun-18	MOM	Jul-17
Mid-Size Car	130,000	150,550	147,376	-13.6%	-11.8%	9.2%	9.6%	-0.3%	10.7%
Compact Car	160,000	182,107	182,382	-12.1%	-12.3%	11.3%	11.8%	-0.5%	12.9%
Compact SUV/Crossover	270,000	236,644	285,474	14.1%	-5.4%	19.1%	18.5%	0.6%	16.8%
Full-Size Pickup Truck	205,000	201,268	216,867	1.9%	-5.5%	14.5%	14.1%	0.5%	14.3%
Mid-Size SUV/Crossover	215,000	202,023	229,948	6.4%	-6.5%	15.2%	14.9%	0.3%	14.3%
Grand Total²	1,410,000	1,410,593	1,541,998	0.0%	-8.6%
¹Cox Automotive Industry Insights data
² Total includes segments not shown

All percentages are based on raw volume, not daily selling rate. There are 24 sales days in July 2018. In July 2017 there were 25.

Additional Insights from the Cox Automotive team
Cox Automotive will host its monthly automotive sales day call on Wednesday, August 1, at 11 a.m. EDT. Chesbrough and Michelle Krebs, senior analyst from Autotrader, will provide an economic overview, share industry trends and answer questions.

To discuss any automotive-related topic with a Cox Automotive analyst, contact a member of the Public Relations team to schedule an interview.

About Cox Automotive
Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader^®, Dealer.com^®, Dealertrack^®, Kelley Blue Book^®, Manheim^®, NextGear Capital^®, VinSolutions^®, vAuto^® and Xtime^®,are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com