July sales are expected to look weak when the numbers are posted next week as sales continue to drift sideways as the pandemic keeps a tight grip on the U.S. economy.
Cox Senior Economist Charlie Chesbrough is calling for July auto sales volume to be down 19% versus year ago level, but up versus June as the industry continues to slowly recover from the lockdowns that closed thousands of dealerships in March, April and May.
Meanwhile, the Conference Board reported this week that consumer confidence underpinning of new vehicle sales has been declining.
ALG is projecting new vehicle sales will reach 1,189,928 units in July 2020, down 18% from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 14 million units. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1,091,152 units, a decrease of 15% from a year ago when adjusted for the same number of selling days.
“The increase in COVID-19 cases across the country have caused states such as Texas, Florida and California to take steps back in their economic re-openings,” said Eric Lyman, Chief Industry Analyst for ALG, a subsidiary of TrueCar,” said Eric Lyman, Chief Industry analyst for ALG, a subsidiary TrueCar.
“Despite this trend, we are not seeing automotive sales drop as low as they did in the spring at a national level. In fact, even with the low new vehicle inventory levels that we are noticing across many popular models, we’re seeing sales continue to bounce back.”
“There’s finally some positive signs for automakers on the fleet side of the house,” added Lyman. “Fleet sales were down nearly 70% year-over-year last month, while this month we’re projecting the decline will slow to 40% with a 17% uptick month over month.”
Nick Woolard, director of OEM and Affinity Partner Analytics at TrueCar, said mainstream brands are steadily increasing their new vehicle sales month-over-month, especially brands with healthy inventory levels such as Fiat Chrysler.
Jeep stands out for strong performance, likely driven by strong incentive programs as well as the inventory levels needed to satisfy the unique demands of shoppers, Woolard said.
“As consumers seek more cost-effective options while shopping, used vehicles continue to show strong recovery, up nine percent year-over-year and roughly in line with June. Lower than average inventory levels on new cars as well as economic uncertainly may be causing some consumers to opt for used vehicles,” added Woolard.