The August new-vehicle selling rate is expected to be the highest monthly rate in more than four and one-half years, according to a monthly sales forecast developed by J.D. Power and Associates' Power Information Network and LMC Automotive.
August new-vehicle retail sales are projected to come in at 1,066,200 units, which represents a seasonally adjusted annualized rate (SAAR) of 12.3 million units (see chart above). The year-over-year growth rate in retail sales continues a double-digit trend for a fourth consecutive month. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.
"August continues this summer's trend of healthy growth in retail sales as dealers work to sell down inventory in time to make room for 2013 models," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "To date, automakers have been diligent in better balancing production with demand, which has been critical to the improved financial performance for many brands. Going forward, this discipline will be tested as demand looks to cool somewhat through the balance of the year."
MP: The expected strength in new vehicle sales this month is consistent with the facts that: a) rail shipments of motor vehicles year-to-date through mid-August are running 21% above last year, and b) motor vehicle assemblies in July of this year reached a five-year high of more than 11 million units at an annual rate, the highest since June 2007. Despite the ongoing weaknesses in the labor market and an 8.3% jobless rate, we've been seeing offsetting strengths in new vehicle sales all year and now recently strengths developing in the U.S. housing market. If new vehicles sales in August do come in at a four and a-half year high, it would be one more reason to doubt that the U.S. economy will fall into another recession this year.
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