The buyers are not acting reserved – Federal or otherwise. Click to Enlarge.
New-vehicle retail sales for September 2022 are expected to increase when compared with September 2021, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales of new vehicles this month are forecast to reach 958,948 units, a 5.4% increase when compared with September 2021. September 2022 has the same number of selling days compared with September 2021. Total new-vehicle sales for September 2022, including retail and non-retail transactions, are projected to reach 1,120,279 units, an 11.8% increase from September 2021. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 13.6 million units, up 1.5 million units from 2021. (AutoInformed: US July Sales Forecast Down. Prices, Profits Still Records)
While there is much fretting about the Federal Reserve’s monetary tightening, during September new-vehicle prices remain at the highest levels. The average transaction price is expected to reach $45,622 – a record for September. This is a 6.3% increase from a year ago and the fourth highest of any month on record. The increase in volume, coupled with record transaction prices, results in consumers tracking to spend ~$43.7 billion on new vehicles this month – the highest level ever for the month of September and a 12% increase from September 2021.
“Traditionally, September is a high-volume sales month as manufacturers implement promotions for Labor Day to clear out old model-year vehicles and start sales of the new model-year products. This September, while holiday promotions were nearly nonexistent, modest improvements in vehicle production allowed manufacturers to tap pent-up consumer demand. The result is a retail sales pace that shows a modest increase from a year ago but still falls below its potential due to tight vehicle availability. Although rising interest rates are putting pressure on affordability, transaction prices still rose and consumers spent more money on new vehicles this month than any previous September on record,” said Thomas King, president of the data and analytics division at J.D. Power.
September is tracking as the 16th consecutive month that retail inventory closes below one million units. Dealerships are continuing to pre-sell vehicles in their delivery pipeline. This month, 53% of vehicles will be sold within 10 days of arriving at a dealership, while the average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 20 days, down from 23 days a year ago.
New-vehicle total sales for Q3 2022 are projected to reach 3,374,500 units, a 0.2% increase from Q3 2021. New-vehicle total sales for year-to-date Q3 2022 are projected to reach 10,156,000 units, a 13.3% decrease from year-to-date Q3 2021.
Global Sales Outlook
“The China-led recovery in global light-vehicle sales continued in August, with the selling rate hitting 91.3 million units and topping July by more than one million units. Sales volume was up 14% year over year to 6.7 million units but remained 9% below the pre-pandemic August average. China’s sales increased 34% but strong growth was also seen across the ASEAN market, which increased 59%. India was up 27%. Both North America (up 3%) and Western Europe (up 1%) reversed the declines from a year ago thanks to some inventory relief,” said Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive.
“Global light-vehicle sales are expected to continue the positive trend in September, with volume up 15% from a year ago—but September 2021 was severely affected by the chip shortage and other supply disruptions. As a result, the selling rate is expected to fall to 84.3 million units, which is still 10.8 million units higher than September 2021. Given the constraints of a year ago, growth across the world is expected to be more synchronized, with main markets expected to increase in the 10-15% range. Asian markets are expected to outperform the rest of the world, with India’s volume projected to nearly double from the 2021 volume,” said Schuster.
“The increase in China and other parts of Asia has stabilized the global market and offset expected losses in North America, Europe, Japan and Brazil in 2022. We continue to expect global light-vehicle sales to remain at 82 million units, but the increase is now just 0.2% from 2021. We have been concerned that the boost in China sales would greatly deplete inventory levels but inventory in China has increased in the past three months, while demand has been hitting record selling rates. Inventory shortages appear to be less of an issue, though pull forward effect is expected to slow growth in China as the year closes and we head into 2023. As the likelihood of a global recession increases, the expected 5% growth to 85 million units is at risk,” said Schuster.
Record September for US New-Vehicle Spending at $45,622
The buyers are not acting reserved – Federal or otherwise. Click to Enlarge.
New-vehicle retail sales for September 2022 are expected to increase when compared with September 2021, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales of new vehicles this month are forecast to reach 958,948 units, a 5.4% increase when compared with September 2021. September 2022 has the same number of selling days compared with September 2021. Total new-vehicle sales for September 2022, including retail and non-retail transactions, are projected to reach 1,120,279 units, an 11.8% increase from September 2021. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 13.6 million units, up 1.5 million units from 2021. (AutoInformed: US July Sales Forecast Down. Prices, Profits Still Records)
While there is much fretting about the Federal Reserve’s monetary tightening, during September new-vehicle prices remain at the highest levels. The average transaction price is expected to reach $45,622 – a record for September. This is a 6.3% increase from a year ago and the fourth highest of any month on record. The increase in volume, coupled with record transaction prices, results in consumers tracking to spend ~$43.7 billion on new vehicles this month – the highest level ever for the month of September and a 12% increase from September 2021.
“Traditionally, September is a high-volume sales month as manufacturers implement promotions for Labor Day to clear out old model-year vehicles and start sales of the new model-year products. This September, while holiday promotions were nearly nonexistent, modest improvements in vehicle production allowed manufacturers to tap pent-up consumer demand. The result is a retail sales pace that shows a modest increase from a year ago but still falls below its potential due to tight vehicle availability. Although rising interest rates are putting pressure on affordability, transaction prices still rose and consumers spent more money on new vehicles this month than any previous September on record,” said Thomas King, president of the data and analytics division at J.D. Power.
September is tracking as the 16th consecutive month that retail inventory closes below one million units. Dealerships are continuing to pre-sell vehicles in their delivery pipeline. This month, 53% of vehicles will be sold within 10 days of arriving at a dealership, while the average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 20 days, down from 23 days a year ago.
New-vehicle total sales for Q3 2022 are projected to reach 3,374,500 units, a 0.2% increase from Q3 2021. New-vehicle total sales for year-to-date Q3 2022 are projected to reach 10,156,000 units, a 13.3% decrease from year-to-date Q3 2021.
Global Sales Outlook
“The China-led recovery in global light-vehicle sales continued in August, with the selling rate hitting 91.3 million units and topping July by more than one million units. Sales volume was up 14% year over year to 6.7 million units but remained 9% below the pre-pandemic August average. China’s sales increased 34% but strong growth was also seen across the ASEAN market, which increased 59%. India was up 27%. Both North America (up 3%) and Western Europe (up 1%) reversed the declines from a year ago thanks to some inventory relief,” said Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive.
“Global light-vehicle sales are expected to continue the positive trend in September, with volume up 15% from a year ago—but September 2021 was severely affected by the chip shortage and other supply disruptions. As a result, the selling rate is expected to fall to 84.3 million units, which is still 10.8 million units higher than September 2021. Given the constraints of a year ago, growth across the world is expected to be more synchronized, with main markets expected to increase in the 10-15% range. Asian markets are expected to outperform the rest of the world, with India’s volume projected to nearly double from the 2021 volume,” said Schuster.
“The increase in China and other parts of Asia has stabilized the global market and offset expected losses in North America, Europe, Japan and Brazil in 2022. We continue to expect global light-vehicle sales to remain at 82 million units, but the increase is now just 0.2% from 2021. We have been concerned that the boost in China sales would greatly deplete inventory levels but inventory in China has increased in the past three months, while demand has been hitting record selling rates. Inventory shortages appear to be less of an issue, though pull forward effect is expected to slow growth in China as the year closes and we head into 2023. As the likelihood of a global recession increases, the expected 5% growth to 85 million units is at risk,” said Schuster.