The U.S. automotive industry’s recovery continues to be slow but remains on track for the month of August, with an anticipated seasonally adjusted annual rate (SAAR) of 14.9 million — up from July’s 14.5 million pace but down from 2019’s 17.1 million level, according to Cox Automotive.
According to the company’s forecast, sales volume in August is expected to increase by seven per cent (90,000 units) from August to reach 1.30 million. However, vehicle sales are also forecast to be down nearly 330,000 units that month, year-over-year (nearly 20 per cent) — though seasonal adjustments suggest the volume decline is not as significant as it may appear.
Overall, August is showing signs of continued recovery but the pace of sales improvement appears to be slowing, according to Charlie Chesbrough, Senior Economist at Cox Automotive.
“While the market continues to slowly improve, there are a number of factors preventing more robust gains,” said Chesbrough. “Limited inventory for some brands, as well as the ongoing high unemployment and low confidence from the pandemic, continue to keep sales from rebounding more quickly. There’s been a noticeable pull-back in incentives as well.”
The problems will likely persist, he said, at least in the near term. Limited inventory continues to impact much of the market, with brands such as Toyota, Lexus, and BMW wrestling with significant shortages. They all had less than 40 days of available inventory towards the end of August, compared to the current industry average of 60 days.
“Obviously, you can’t sell what you don’t have,” said Chesbrough. “The lack of inventory likely kept some potential buyers out of the market.”
Research from Cox Automotive indicates that nearly 20 per cent of dealers have raised retail prices since the start of the pandemic. And a similar percent of consumers said they are putting their vehicle purchase on hold as they await a better deal.
