July’s new vehicle retail sales pace in the U.S. is expected to decline for the fourth consecutive month, according to a forecast from J.D. Power and LMC Automotive.
The seasonally adjusted annualized rate (SAAR) for retail sales in July is expected to be 14.1 million units, a decrease of 600,000 units from a year ago. Actual retail sales in July are expected to reach 1,236,000 units, a 1.7 per cent year-over-year decrease.
“While the retail selling rate will post declines again in July, the larger concern remains the continued deterioration of key industry health indicators,” said Thomas King, vice president of PIN OEM operations, media and marketing at J.D. Power
Elevated inventory levels, coupled with the sales slowdown, have prompted manufacturers to maintain aggressive discounts through July, he said.
Despite record discounts, however, the average new vehicle sold in July spent 72 days in inventory — the highest level since 2009. Meanwhile, the use of extended loan terms continues to grow.
“The second half of the year will continue to present challenges to manufacturers as they navigate a hyper competitive and dynamic marketplace, while working to find the optimal mix of production cuts and discounting necessary to align supply, demand and inventory levels,” said King.
