Q3 auto sales are slated to decline, may be strongest of year

Despite an expected decline in light-vehicle sales, the third quarter is slated to be the strongest in a year mired by the coronavirus pandemic, industry forecasters say.

Most auto makers plan to release September and third-quarter U.S. sales results Oct. 1, and forecasters expect new-vehicle retail sales to continue recovering while leasing volume and fleet demand remain depressed.

U.S. light-vehicle sales fell 22 percent to nearly 9 million through August, according to J.D. Power and Cox Automotive.

J.D. Power and LMC Automotive expect 3.5 million retail sales in the third quarter, down 6.2 percent from the third quarter of 2019, but a smaller decline than in the first and second quarters, when sales fell 13 percent and 23 percent.

The seasonally adjusted, annualized rate of sales will hit 15.7 million in September, J.D. Power and LMC project, or about 200,000 vehicles higher than Cox’s projection and about a million higher than ALG’s.

The SAAR tallied 15.2 million in August and 17.2 million in September 2019. It has inched up every month since bottoming out at 8.74 million in April.

The forecasters expect September to be the first month of year-over-year sales gains since February, before the pandemic struck the U.S. and temporarily shuttered showrooms and assembly plants.

The month benefited from Labor Day deals, two extra selling days and resilient consumer demand, despite tight inventory levels.

The average days’ supply in September was 56, the first time it has fallen below 60 days in at least five years, J.D. Power said. And just under half of all vehicles sold in September will have been on dealers’ lots for fewer than 20 days, J.D. Power and LMC said.

Strong market

Franchised dealers view the market as strong, according to research by Cox Automotive, but they say tight inventory is the top issue hindering business. Auto makers are back to pre-coronavirus production levels, Cox said, but they haven’t made up for output lost when plants were closed in the spring.

The imbalance between supply and demand is leading to lower incentive spending industrywide, a shift from aggressive discount programs automakers launched to stoke demand earlier this year.

Industrywide, incentive spend increased 1.3 percent to $4,002 per vehicle in the third quarter compared with a year earlier, according to ALG.

Many customers have also extended their leases, keeping them out of the market longer. Leases made up 27 percent of retail sales in the second quarter, compared with 32 percent a year earlier, Cox said. Leasing data is reported on a delayed basis, and third-quarter projections are not available. For the full year, Cox expects leasing to make up 27 percent of retail sales, down from 29.8 percent in 2019. Before the pandemic, Cox forecast that leasing would again exceed 29 percent of the retail market.

The decline was driven in part by zero- and low-interest long-term loan programs in April and May and coronavirus-related restrictions in Northeastern states, where leasing is popular, Cox said.

Fleet sales also continue to struggle. Edmunds estimates that fleet volume will account for 10.8 percent of total sales in the third quarter, down from 17.2 percent a year earlier.

“Daily rental companies have understandably reduced or delayed orders as Americans continue to stay at home rather than embark upon business or air travel,” said Jessica Caldwell, Edmunds’ executive director of insights. “It will likely take a bit longer for this side of the business to make as dramatic a comeback as its retail counterparts.”

Brand breakdown

Cox forecasts an 11 percent sales boost for Volvo, along with a 2 percent increase for Hyundai-Kia and slight increases for Tesla and Mazda.

But most auto makers are likely to face double-digit sales decline, Cox says. Nissan’s sales are expected to fall 30 percent, and Mitsubishi and Jaguar Land Rover sales are expected to decline more than 20 percent. Industrywide, Cox expects third-quarter sales to dip 12 percent to 3.8 million.

Source Article

send message
Iam Guest Posting Services
I Have 2000 sites
Status : Indexed All
Good DA : 20-60
Different Niche | Category
Drip Feed Allowed
I can instant publish

My Services :

1. I will do your orders maximum of 1x24 hours, if at the time I'm online, I will do a maximum of 1 hour and the process is
2. If any of your orders are not completed a maximum of 1x24 hours, you do not have to pay me, or free.
3. For the weekend, I usually online, that weekend when I'm not online, it means I'm working Monday.
4. For the payment, maximum payed one day after published live link.
5. Payment via PayPal account.

If you interesting, please reply

Thank You