DETROIT, July 29, 2016 /PRNewswire/ -- New-vehicle retail sales in July are expected to increase 2.1% from a year ago to 1,318,300, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.
Sales growth in July is supported in part by an extra weekend in 2016, compared with July 2015. Consumer spending is poised to surpass $40 billion for just the fifth time in history, even with modest sales growth, as new-vehicle retail transaction prices are at record levels for the month of July.
New-vehicle retail transaction prices thus far in July are at $30,601. The previous record for the month was $30,041, set in July 2015.
With record transaction prices, consumers are on pace to spend $40.3 billion on new vehicles in July, surpassing the record high of $38.8 billion for the month of July set in 2015. The record for consumer spending on new vehicles in any month is $43.7 billion, set in December 2015.
Trucks are accounting for 60.8% of new-vehicle retail sales so far in July. Trucks have accounted for more than 60% of sales just four times on record.
The seasonally adjusted annualized rate (SAAR) for retail sales in July 2016 is projected to reach 14.8 million units, up from 14.4 million units in July 2015.
Total new-vehicle sales in July 2016 are projected to hit 1,545,400, a 2.4% increase from July 2015. The SAAR for total sales is projected at 18.1 million units in July 2016, up from 17.5 million units a year ago.
Fleet sales are expected to reach 227,000 in July, a 4.5% increase from July 2015, and account for 14.7% of total light-vehicle sales.
LMC Automotive's full-year total light-vehicle sales forecast is 17.4 million units, a decline of 0.1%, or 15,000, from 2015.
J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons
New-Vehicle Retail Sales
(2.1% higher than July 2015)1
Total Vehicle Sales
(2.4% higher than July 2015)
14.8 million units
13.1 million units
14.4 million units
18.1 million units
16.6 million units
17.5 million units
1 Figures cited for July 2016 are forecasted based on the first 19 selling days of the month.
Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power, said: "Despite the modest sales gains, July is a strong month for the industry in terms of consumer spending. While incentive spending continues to rise and is at its highest level so far in 2016 ($3,680), strong truck mix continues to enable record-level transaction prices. Consumer spending in July will hit its highest level so far in 2016."
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: "This is proving to be a dynamic year in terms of automotive demand volatility. The environment influencing volume remains variable as well, with continued low interest rates and higher incentives helping demand. This will be a historic year for U.S. autos, with 2016 either being the first decline since 2009 or a record sales year that nudges past 2015—it is that close at this stage and could go either way."