New-Car Sales Expected to Rise

By Staff Writer September 28, 2020 272

New-vehicle retail sales in September are expected to be up from a year ago, according to a joint forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,157,800 units, a 3.4 percent increase compared with September 2019. Reporting the same numbers without controlling for the number of selling days translates to an increase of 12.4 percent from a year ago. While the increase vs. September 2019 is substantial, it’s important to recognize that it is being aided by the industry sales reporting calendar. September 2020 contains two additional selling days than September 2019 and has the added benefit from promotional activity related to the Labor Day weekend, which last year fell into August sales reporting.

Total sales in September are projected to reach 1,288,100 units, a 7.5 percent decrease from September 2019. Reporting the same numbers without controlling for the number of selling days translates to an increase of 0.5 percent from September 2019. The seasonally adjusted annualized rate (SAAR) for total sales is expected to be 15.7 million units, down 1.6 million units from a year ago.

“Retail sales in September are poised to post the first year-over-year gain since February, a milestone in the recovery from the disruption that COVID-19 has had on the industry,” said Thomas King, president of the data and analytics division at J.D. Power. “While the results are flattered by the Labor Day holiday falling within the month, the performance points to strong underlying consumer demand for new vehicles. This is despite tight inventory for many of the most popular vehicles.”

The average number of days a new vehicle sat on a dealer lot before being sold is on pace to fall to 56 days, the first time below 60 days in five years. Additionally, more than 45 percent of all vehicles sold in September will have spent fewer than 20 days on dealer lots.

This is enabling manufacturers to reduce overall new vehicle incentives and retailers to reduce the discounts off MSRP that have historically been offered. Incentive spending is expected to fall to the lowest level since July 2019. Concurrently, the average trade-in value has risen to $4,951, an increase of $634 or 14.7 percent from a year ago.

Rate this item
(1 Vote)
Last modified on Monday, 28 September 2020 13:29