Cox Automotive Forecast: U.S. Auto Sales Pace Expected to Fall from June Level

ATLANTA, July 26, 2019 /PRNewswire/ -- Cox Automotive is forecasting July U.S. auto sales volume to finish at 1.38 million, rising 0.5% from last year, or about 7,000 units. The seasonally adjusted annual rate (SAAR) is expected to drop to 16.6 million, below June's 17.3 million level, and down slightly from July 2018's 16.7 million pace. July 2019 has 25 selling days, one more than last July, which causes the SAAR to fall significantly even though sales volume rises. 

"Strong consumer confidence and employment gains are supporting stable demand for light vehicles," said Charlie Chesbrough, senior economist, Cox Automotive. "However, affordability issues continue to weigh on the market. The estimated average transaction price for a new light vehicle in the U.S. is $37,285 in the most recent Kelley Blue Book report, and we do not see this number coming down."

In total, vehicle sales in the first half of 2019 were down 2.2%, or nearly 200,000 units. Fleet sales, both commercial and rental, have been the key to supporting the new-vehicle market in the first half. They are likely to remain strong through the year. Retail purchasing and leasing activity was down in the first half of this year, extending the trend from 2018, as consumer activity slows due to affordability concerns.

Market Volatility Remains a Challenge
Volatility has been as issue in the market in 2019 as the SAAR has shown large swings over various months.  Some of these swings can be attributed to the harsh winter in much of the country. However, the largest variable continues to be fleet volume. Sales of both commercial and rental fleet vehicles have been on the rise due in part to increased depreciation allowances for business-use vehicles. The market has seen increased fleet activity and business-use vehicle purchases, and this trend is likely to extend into 2020.

July 2019 Sales Forecast Highlights

• In July, new light-vehicle sales, including fleet, are forecast to reach 1.38 million units, up 0.5% or 7,000 units, from July 2018. However, versus June 2019's strong performance, sales are expected to fall more than 9%, or more than 140,000 vehicles.
• The SAAR in July 2019 is estimated to be 16.6 million, down from last month's surprisingly strong 17.3 million level and down slightly from last year's 16.7 million pace. This July has 25 selling days, one more than last July, which is contributing to the relatively weak SAAR estimate given an increase in sales volume.
• Record volume for July occurred in 2005 when sales reached 1.8 million vehicles and a SAAR of 20.6 million. The record occurred during the summer of "no haggle" incentive programs when employee pricing for all buyers was widespread. Even with the volume of unique incentive programs running high all year, it is unlikely that new records will be reached this month.

July 2019 Forecast

All percentages are based on raw volume, not daily selling rate.

About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning and using cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader^®, Clutch Technologies, Dealer.com^®, Dealertrack^®, Kelley Blue Book^®, Manheim^®, NextGear Capital^®, VinSolutions^®, vAuto^® and Xtime^®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com

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SOURCE Cox Automotive