New light-vehicle sales in August continued to decline with diminishing inventory on dealer lots. Sales in August totaled a SAAR of 13.1 million units, the lowest level since June 2020’s 13 million. August’s sales rate reduced the year-to-date SAAR to 16.1 million units from 16.5 million last month. August began with record-low inventory levels, and by month’s end total inventory had fallen an additional 5.2% for a new record low of 1.06 million units.
“Given the continuing announcements of plant shutdowns throughout the industry, sales for the rest of the year will likely be limited by these inventory constraints,” said Patrick Manzi, NADA Chief Economist. (Read AutoInformed.com on August Vehicle Sales to Drop as Prices Hit Record High; US Auto Sales Forecast Down Again in August)
“The month of August is historically a peak selling month as manufacturers launch promotional events to clear inventories of outgoing model-year vehicles and begin sales of the new model year. This year, however, the industry has insufficient inventory at dealerships to meet strong consumer demand. The consequence is that the retail sales pace is depressed, but transaction prices are elevated,” said Thomas King, president of the data and analytics division at J.D. Power.
Vehicle production is not expected to rise this year. According to IHS Markit, the North American light-vehicle production forecast has been cut by several hundred thousand units to 13.9 million vehicles. “It’s still unclear exactly when manufacturers will be able to produce enough vehicles to meet current market demand and begin to build back inventory levels from current historical lows. Unfortunately, given the recent production-cut announcements for September and other ongoing supply chain disruptions, we expect little change to inventory levels next month,” said Manzi of NADA.