US Auto Sales are Expected to Rise in August due to the Labour Day Weekend Surge

According to a survey released on Thursday by industry consultants J.D. Power and GlobalData, sales of new auto vehicles in the United States are anticipated to increase by more than 4% in August compared to the same month a year ago. This increase will be partially attributed to the fall of Labor Day weekend within the reporting period.

Based on a seasonally adjusted annualised rate (SAAR), which takes into account the circumstances surrounding Labour Day, sales are anticipated to remain relatively unchanged at 15.3 million units.

Auto Sales: REASONS WHY IT IS IMPORTANT

At the same time, as average transaction prices are decreasing, dealers and manufacturers are increasing their discounts, which has resulted in a modest increase in the SAAR for August.

In addition, the sector is struggling to cope with the consequences of decreased leasing activity compared to three years ago. A smaller number of leases signed back then indicates that fewer lessees are going back to dealers to buy or lease a new car.

Despite the high competition in the gasoline-powered vehicle market, J.D. Power said on Wednesday that the growth rate of electric vehicle sales in the first half of 2024 would be slower than projected.

RELYING ON THE DATA

From the previous year, it is anticipated that the total number of new car sales for the month of August, which includes both retail and non-retail transactions, would increase by about 4.2% to a total of 1,437,954 units.

The current trend for transaction prices is towards $44,039, which is a decrease of $1,895 from the previous year.

The expectation is that the total retailer profit per unit will be $2,249, which is a decrease of 33% from August 2023. This includes the gross profit from automobiles as well as the revenue from financing and insurance.

QUOTES OF FAME

According to Elizabeth Krear, vice president of the electric vehicle practice at J.D. Power, “An increase in the transition to electric vehicles will take time, with several interdependent variables affecting adoption.”

According to Jeff Schuster, vice president of research for automotive at GlobalData, “the global demand recovery is showing signs of slowing,” and “lower volume is tempering the outlook for the rest of the year.”

Source: USNews