Despite market analysts forecasting that August would offer a sizable boost in automotive sales, aided by the fact that Labor Day weekend partially overlaps with the end of the month, customers failed to come out in droves to buy a new vehicle. August had everything working in its favor to bolster sales and came up a little short of expectations. Though it was hardly a bloodbath for dealers and prices are starting to trend in favor of shoppers. Consider this an addendum to our earlier coverage of the declining dealer market sentiment.
July represented somewhat of a slump, so the hope was that August would pick up the slack. However it’s tough to tell what happened when many automakers now report sales on a quarterly basis and data trickles in from dealerships. Even outlets that make sales tracking their bread and butter are sometimes confusing due to the way seasonally adjusted annual rates (SAAR) of sale are calculated.
SAAR is supposed to take into account things like how long a month happens to be, the average number of weekends in a given year and how seasonal trends impact consumer trends. This is then multiplied by twelve to work off the entire year, as the concept is to take the pulse of how the market is performing on an annualized basis. It’s useful for the industry, since it takes into account variables that could create large variances between years, but it also kind of obfuscates the hard data by adding in a multitude of factors.
If you just want the baseline numbers, August U.S. sales volumes were 1.42 million units. That’s up from 7.6 percent from August 2024, which wasn’t particularly robust. The average daily selling rate was 50,670 units, which is 3.8-percent above August 2023 at 48,837 units. However, that figure did give the month an extra day for this year. The vast majority of the headway hinged on truck and SUV sales, which make sense since that’s what most automakers are currently producing.
While that sounds good, adjusted volumes fell by 4.5 percent month-on-month to 15.1 million annualized units. Analysis had expected higher, with most ranging between an SAAR between 15.4 and 16.0 million units.
It’s not a brutal shortfall sounding the death knell of the automotive sector. But it’s also not quite what many had hoped for and technically lower than August 2023’s SAAR of 15.3 — due to this year being a longer month with a holiday that was assumed to drive sales a little.
Keep in mind that a lot of the numbers (even the baseline figures) still require some guess work since not everyone reports their sales figures at the same time. If you want additional details on sales figures Cox Automotive has a fairly comprehensive analysis, as does J.D. Power. However, those were both conducted before the month had concluded and not all figures will match.
The global sales forecast for the rest of the year could be a little better for both manufacturers and dealers. Sales are assumed to be slightly higher than what we saw in 2023. But nobody seems to be anticipating surging sales domestically or on the global market. Interest rates are routinely claimed to be doing the most damage here, which makes sense since they’re elevated. The typical interest rate for new-vehicle loans is likely just shy of 7 percent.
September is assumed to be a relatively lean sales period vs the previous year and market analysts are expecting factory incentives to rise and are already much higher than we’ve seen in the last few years. Still, a lot of people are assumed to be financially tapped out and disinclined to purchase new considering average monthly payments are presently hovering around $730.
On the bright side, used prices have declined slightly. J.D. Power estimated that second hand vehicles sold in August were about 4.5 percent cheaper than they were a year before. Sadly, trade-in values have also declined — dropping by an average of $1,433 vs a year ago.
[Image: Gretchen Gunda Enger/Shutterstock]
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