Information contained on this page is provided by an independent third-party content provider. Frankly and this Site make no warranties or representations in connection therewith. If you are affiliated with this page and would like it removed please contact email@example.com
SOURCE J.D. Power
Incentives Reach All-Time Record High
DETROIT, Sept. 29, 2017 /PRNewswire/ -- The new vehicle retail sales pace in September is expected to reach the highest level this year, according to a forecast developed jointly by J.D. Power and LMC Automotive. The seasonally adjusted annualized rate (SAAR) for retail sales is expected to be 15.0 million units, flat from a year ago. Retail sales in September are anticipated to reach 1,213,102 units, a 2.6% decrease (selling day adjusted) compared with September 2016.
"Hurricanes Harvey and Irma have disrupted-and will continue to disrupt-new-vehicle retail sales in September and beyond," said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. "While, on a national basis, September month-to-date sales are down 0.8% from last year, in the South Central region, which includes Houston, sales are up 14% as shoppers replace storm-damaged vehicles and complete purchases that were postponed during the storm. In contrast, sales in the Southeast region, which includes Florida, are down 16% as the region and its vehicle retailers begin to return to normal operations."
The sales decline in the Southeast will be reversed in the coming weeks as buyers completed delayed purchases, but the recovery will likely spill over into October.
Incentives have reached all-time highs as manufacturers continue with aggressive discounting to clear out record inventories of prior model year vehicles. Average incentive spending per unit to date in September has set a new record at $4,050, surpassing the previous high of $4,024 in November 2016. New model year vehicles account for just 17% of sales so far in September, compared with 28% last year.
"While the industry will benefit from additional replacement demand from storm damaged vehicles in the coming months, elevated incentives remain a threat to the overall health of the industry," King said.
J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons
New-Vehicle Retail Sales
(-2.6% lower than September 2016)2
Total Vehicle Sales
(-4.0% lower than September 2016) 2
15.0 million units
12.8 million units
15.0 million units
17.5 million units
16.1 million units
17.7 million units
1Figures cited for September 2017 are forecasted based on the first 19 selling days of the month.
2September 2017 has 26 selling days, while September 2016 had 25 selling days in the month.
Jeff Schuster, Senior Vice President of Forecasting at LMC Automotive, said, "The effect of hurricanes Harvey and Irma is expected to boost retail light vehicle demand through the remainder of 2017 and into 2018, as recovery continues. With the need to replace 500,000 or more damaged or destroyed vehicles, the U.S. auto market slowdown will see some relief as demand over the next 6-9 months will likely be upwardly distorted. In addition, a short-term increase in fleet sales may also be an outcome as current shortages are replenished. However, this does not change the overall expectation of level to weaker demand in the U.S. over the next 2-3 years."
Driven by vehicle replacement need, LMC's outlook for 2017 total light-vehicle has been increased by 70,000 units to 17.1 million. The retail light-vehicle outlook has been increased to 13.9 million units from 13.8 million. As part of the increase in retail sales, we have made a minor adjustment the the retail/fleet pattern for the remainder of 2017. Retail sales are expected to be down 1.4% from 2016, while fleet volume is projected to contract by 8.0% this year.
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power or LMC Automotive. www.jdpower.com/corporate www.lmc-auto.com
©2017 PR Newswire. All Rights Reserved.