Forecast: Strong Summer Sales to Continue in August

A new WardsAuto forecast calls for August U.S. light-vehicle sales to continue to gain ground on year-ago, as the industry seasonally adjusted annual rate stays in line with recent trend.

The report calls for just under 1.51 million LV deliveries this month, equating to a daily sales rate of 55,761 units (over 27 days) – a 4.3% improvement over same-month year-ago (28 days).

The projected DSR represents a 1.5% jump from the prior month (26 days), roughly double the average July-August increase of the past three years.

The forecast 16.6 million-unit SAAR would fall directly in line with the current 3-month (May-July) SAAR, and nearly 500,000 units above the year-to-date SAAR for the first seven months of 2014.

July sales equated to 16.4 million SAAR, but underperformed most analyst expectations. August marks the traditional beginning of sales aimed at moving current models off dealer lots to make way for soon-to-arrive next model-year vehicles. Paired with low interest rates, the seasonal incentive spending by automakers should drive retail deliveries to their highest level of 2014.

The WardsAuto forecast also calls for fleets to maintain a comparable share of total sales compared with August 2013.
Consumer sentiment, as measured by the Conference Board Consumer Confidence Index, rose for the third consecutive month in July to its highest level since October 2007, with month-to-month increases in the group’s present situation and expectations indices.
Other indicators also provided a basis for optimism: sales of existing homes and new housing starts both hit 2014 highs in July, while unemployment sat at 6.2% as employers added 209,000 new jobs.

Supply won’t hinder sales, as record July output in North America helped boost industry inventory to a robust 61 days’ supply entering August.

The WardsAuto forecast calls for an 8% rise in Detroit Three automaker daily sales compared with year-ago – leading all regions in year-over-year gains for the month and accounting for 45.6% of industry LV volume compared with 44% for the same-month year-ago.
General Motors is expected to sell 281,000 cars and light trucks, a 5.7% gain in DSR and a projected market share of 18.7%.

Ford deliveries are projected to rise 4.8% on a daily basis, to 219,000 units, while the automaker maintains a 14.5% market share equal to year-ago. However, the forecast calls for Ford to undersell Toyota for the second consecutive month, again largely due to a planned slowdown in F-Series sales.

Fiat-Chrysler daily sales are forecast to rise 16.1% from year-ago – equating to nearly 185,000 deliveries and a 12.3% share.

Asian automakers’ collective DSR is forecast to rise just 1.5% over relatively strong year-ago results, on total LV deliveries of just under 700,000 units – giving the group a 46.2% share of sales.
Toyota’s projected 225,000 deliveries would give the company the No.2 sales position for the month and a 14.9% share of the market.
The WardsAuto report also calls for Honda daily sales to fall 8.5% from same-month year-ago, on 146,000 deliveries and a 9.8% share.

The forecast also calls for Nissan to edge Hyundai-Kia handily with 125,000 deliveries compared with the South Korean automakers’ combined 115,000 sales.
Daily sales by European automakers are expected to rise 0.2% compared with same-month 2013, with strong year-over-year performance from luxury marques Audi, BMW and Mercedes expected to just offset another double-digit downturn in Volkswagen brand daily sales.
At forecast levels, year-to-date LV sales through August would come to 11.1 million units, up 4.3% over same-period 2013.
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