Automakers will be reporting new car sales for the month of October next Tuesday, November 1, and initial sales estimates are beginning to roll in. On an annualized basis, the seasonally adjusted annual rate (SAAR) of sales in October of last year was 18.1 million light vehicles (cars, pickups and minivans). That number will decline to 17.8 million units, according to WardsAuto, and to 17.7 million units, according to J.D. Power and partner LMC Automotive.
WardsAuto expects unit sales of 1.36 million vehicles in October, while J.D. Power estimates unit sales of 1.347 million. Sales are adjusted to account for 28 selling days in 2015 compared with 26 selling days this year.
Jeff Schuster of LMC Automotive said:
Although automotive sales are expected to remain near the all-time high, they are still expected to contract slightly this year, as well as in 2017. During the same period, nearly 30% of all models in the market will be new entries or completely redesigned, creating challenging conditions for vehicle manufacturers and automotive suppliers that will test the discipline of the industry for the first time since 2009. So far, automakers are adjusting production levels to manage inventory.
Ford Motor Co. (NYSE: F), for example, is suspending production at its Kansas City F-150 assembly plant this week in an effort to work down inventory. General Motors Co. (NYSE: GM) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) are offering massive incentives in an effort to clear space for 2017 pickups.
Truck sales account for 62.2% of all light vehicle sales so far in October, and if the level holds through the end of the month, that would be a new record. Sales of 2017 models account for 37% of October sales, compared with 40% of October 2015 sales of 2016 models — another reason to incentivize consumers to buy now.
According to J.D. Power, the average new-vehicle retail transaction price thus far in October is $31,383, surpassing the previous record of $30,921 set in October 2015. Incentive spending thus far in October is $3,726 per unit, below the record $3,921 set in September, but 12% above the $3,332 of October 2015.
WardsAuto forecasts Ford’s October sales at about 188,000 units, down 2.3% year over year in daily sales rate and good for a 13.8% market share. GM is expected to sell some 245,000 units, a gain of just 0.2% in daily sales and FCA is expected to post a 2.9% decline in daily sales to 176,000 units. GM’s market share is tabbed at 18% and FCA’s at 13%.
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