SAAR likely to hit 17.2 million units this month with 2.6% increase in total industry volume
TrueCar, Inc. (NASDAQ: TRUE), the negotiation-free car buying and selling mobile marketplace, projects retail auto sales to individual consumers will rise 4.2 percent in July over a year ago on robust demand, summer sales-event momentum and the growing popularity of premium brand vehicles.
Total industry volume, including fleet deliveries, may increase by 2.6 percent with sales of 1,473,300 units, making this July the highest in nine years. With the same number of selling days in July 2015 compared to the same period last year, the seasonally adjusted annualized rate (SAAR) for total light vehicle sales should reach 17.2 million units this month versus last year’s 16.5 million-unit SAAR.
“With strong retail demand from consumers, July is a solid start to the second half of 2015 and the industry is on target to hit TrueCar’s annual 17.1 million-unit projection,” said Eric Lyman, TrueCar’s vice president of industry insights. “This summer, consumers continue to be confident in the U.S. economy, a trend made particularly evident by their penchant for premium brands. That segment’s growth has outpaced mass-market brands this year, and this month, most notably, Acura and Lincoln should see double-digit growth.”
Premium vehicle sales may increase 4.6 percent compared to July 2014, while mass-market volume will rise by only 2.4 percent. Lincoln brand sales could be up as much as 20.8 percent this month, while Acura may post a 15.4 percent increase. July should be the eleventh consecutive month of year-over-year gains for the Lincoln Navigator. Acura TLX sales should be very strong this month, nearly double the average monthly volume of the TL sedan that TLX replaced.
Subaru, Nissan and General Motors should lead industrywide light vehicle retail sales gains among major automakers. Subaru, with an 11.5 percent rise in retail volume, should be the leader. Nissan follows, with a 6.9 percent increase amid gains for the brand’s crossovers. While total sales for GM may be down 1.9 percent due to lower fleet volumes, retail sales should rise 5.9 percent. GM fleet penetration should hit 17 percent of total sales, the lowest level since December 2011.
Incentive spending by automakers averaged $2,849 per vehicle in July, down 1.2 percent from a year ago and down 0.8 percent from June 2015.
Key indicators also point to a strong economic landscape. The consumer price index was up 0.3 percent in June according to the Bureau of Labor Statistics and the Conference Board’s Consumer Confidence Index® improved by 6.8 point in June, hitting 101.4. Meanwhile, the number of applications for unemployment benefits filed during the week ending July 18 was the lowest in 42 years, following June’s unemployment report that came in at 5.3 percent, the lowest for the month in eight years.
Other key findings for July sales:
- Expected registration mix of 88.4 percent retail sales and 11.6 percent fleet versus 87.1 percent retail and 12.9 percent fleet last July.
- Total used auto sales, including franchise and independent dealerships and private-party transactions, may exceed 3,243,681, up 3.0 percent from July 2014.
