July New Car Sales Forecast a Little Better but Still Bad

By Paul Ausick Published Jul 27, 12:14PM EDT

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July New Car Sales Forecast a Little Better but Still Bad — © Courtesy of FCA USA LLC

New car sales are projected to reach about 1.18 million in July, a decline of 18% year over year. The seasonally adjusted annual sales rate (SAAR) are forecast to drop by 16%, from 16.7 million units to 14.0 million units.

The forecast was released Monday by ALG, a subsidiary of TrueCar, a web-based service that provides information and services about the auto industry to consumers, dealers, and other market participants.

As bad as the new figure sounds, the monthly decline is the smallest in five months. New light-vehicle sales dropped by 34% in March, 48% in April, 30% in May and 23% in June due to the impact of the COVID-19 pandemic. The resurgence of infections also has slowed the industry’s recovery but not stopped it.

Eric Lyman, ALG’s chief industry analyst, said even low inventory levels of new cars for sale are not hampering sales. Fleet sales, which tumbled by nearly 70% in June, are expected to be about 40% lower year over year in July.

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The market share leader is expected to be General Motors Co. (NYSE: GM | GM Price Prediction), with a forecast 16.2% of total July sales. Toyota Motor Corp. (NYSE: TM) is forecast to have the second-largest share with 14.2%, with Ford Motor Co. (NYSE: F) in third with 13.8% and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) trailing in fourth with 12.6% of the market.

July retail sales are forecast to be down by nearly 12% year over year from 1.2 million to 1.1 million units. Toyota is expected to post the most sales with 166,199 units, followed by GM with 164,868 units, FCA with 132,416 units and Ford with 127,109 units. Year-over-year declines range from 5.7% (FCA) to 17.9% (GM).

Ford is forecast to lead in fleet sales with 37,134 units, a decline of 5.2% year over year. Toyota’s year-over-year drop in fleet sales is expected to be around 79%. The overall decline in air travel has hobbled car rentals, and government agencies are likely reconsidering purchases as well. Overall, fleet sales are forecast to drop more than 37% year over year in July.

Used vehicle sales remain strong, according to TrueCar’s Nick Woolard, who said that company data showed that “11 percent of consumers who connected with dealers for pricing on a new vehicle ultimately purchas[ed] a used vehicle. This is up 31 percent versus July 2019.”

Mainstream brands are increasing sales more quickly than luxury brands. Woolard noted FCA, especially, where the company’s Jeep brand has both good inventory levels and strong incentive programs. Potential customers for BMW or Mercedes-Benz vehicles are “showing some budgetary discipline,” Woolard said.

None of the U.S. Detroit Three automakers releases monthly figures, but most European and Japanese makers do. Sales reports are due early next week from those companies that still announce monthly sales.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.