U.S. Car Sales Continue to Recover
Strong truck sales boost average transaction prices to all-time high
New-car deliveries in the U.S. climbed in August to 1.3 million units, this year’s second-largest monthly volume to date.
That’s the good news from LMC Automotive. The market analysis firm predicts continued month-by-month gains through the rest of 2020, starting with sales of 1.7 million units in September.
“The U.S. market has surprised on the upside,” says Jeff Schuster, head of global vehicle forecasts.
LMC now expects full-year U.S. sales in 2020 will reach 13.9 million units. That’s 1 million more than the company predicted in April during the depths of the COVID-19 pandemic.
Still, the revised forecast is 18% below the 17.1 million vehicles sold in 2019. August sales trailed the same month last year by 19%. And the September forecast is down 16% year-on-year.
Monthly year-on-year comparisons aren’t likely to turn positive until next March or April. By then, sales should have no difficulty surpassing this year’s abysmal volumes during coronavirus-related business shutdowns.
In the meantime, LMC finds encouraging signs for carmakers in the current pace of recovery.
Consider demand for small and midsize SUVs and large pickup trucks. Those categories accounted for 47% of total U.S. light vehicle sales last month, according to the company. The relatively rich mix resulted in the highest transaction prices—what consumers actually pay—LMC has ever recorded.
At the same time, the size of sales incentives by carmakers declined year-on-year for the first time in 16 months. One worry ahead: Dealer inventories remain low, even though assembly plants are running at or near full capacity.
LMC is upbeat about continued market recovery. But it cautions that the level of uncertainty remains elevated.
Schuster cautions that the coronavirus and/or the Congressional stalemate over another round of economic stimuli could still spoil the recovery party.
Outside of a pickup truck, there is no vehicle that’s sold in greater units than the Toyota RAV4. So when they developed the new generation, they had a whole lot to consider.
What happens if that $2.29 a gallon goes up by a couple of bucks a year from now? How are the pickup, SUV and crossover sales going to be then?
Ford has made an accomplishment that will never be bested, never even be tied.