New vehicles sales hit the brakes in August as buyers appeared to take a break from the market.
Sales of new vehicles stumbled in August and as a result General Motors, Ford, Nissan and Toyota all reported significant drops sales year over year but transaction prices continued to increase right along with incentives, analysts said.
But Fiat Chrysler Automobiles N.V., which has come under for its reporting methods, said its sales increased 3% last month thanks to a strong showing by the Jeep brand, which continues to win new customers with its sport utility vehicles.
Audi also posted a 2.5% sales increase, but Volkswagen, which has been in year-long sales slump, said its sales dropped 9%.
Ford reported an 8% sales decline. Even sales of the Ford F-150, America’s best-selling vehicle, dropped 6%. However, Ford found a silver lining in its sales storm cloud.
“Strong sales of high-end Lincoln vehicles and Ford SUVs also helped us continue outpacing the industry in average transaction pricing, which increased $1,200 versus a year ago,” said Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service. “Vans continue to be a bright spot for Ford – a consistent growth story for us this year.”
August’s record van sales were up 13% versus a year ago, driven largely by Ford Transit gaining 17%, with 11,993 vehicles sold, LaNeve added.
(New car sales expected to slide in August. For more, Click Here.)
Toyota brand vehicles fell 4.6 % and Lexus sales fell 7.6% in August. GM’s total sales in August were down about 5% year over year to 256,429 vehicles. Year to date, GM’s performance reflects a very strong retail business.
Through the first eight months of the year, GM retail sales are up 1%, which continues to be the largest retail share gain of any full-line automaker. Year-to-date, Chevrolet retail sales are up more than 2% and the brand’s retail share has grown 0.5 percentage points. Additionally, Buick retail deliveries have grown 3% and the brand has gained 0.1 percentage points of retail share.
The drop in sales followed a long run of sales increases for the industry. In addition, sales for the same period last year were moving towards record levels. Meanwhile, transaction prices also continue to rise, across the industry as several makers reported rises in their ATP figures.
The analysts at Kelley Blue Book said the estimated average transaction price (ATP) for light vehicles in the United States was $34,143 in August 2016. New car prices have increased by $871 from August 2015, while remaining flat from last month.
(Click Here for details about how to find a good deals on outgoing models.)
“Although new-car sales growth is slowing, average transaction prices continue to climb across the industry, rising 2.6% in August 2016,” said Tim Fleming, analyst for Kelley Blue Book.
“However, incentives also have steadily climbed, and the ratio of incentive spend to average transaction price is at its highest point since 2009, at 9.3%. As we near or pass the peak of new-car sales this year, each automaker will need to moderate production and incentive levels accordingly to maintain residual value strength moving forward.”
In order to take advantage of what Mustafa Mohatarem, GM’s chief economist, believes is an industry “well positioned for a sustainable high level of customer demand,” the makers and dealers are going to have to be on top of their game for next month.
(To see more about GM’s move to amp up sales of its midsize trucks, Click Here.)
“It wasn’t exactly a blockbuster month in August, so that puts extra pressure on the industry to step up its game in September, especially this coming Labor Day weekend. We’re at a critical time where dealers need to clear out 2016 inventory to make room for 2017s, and that’s good news for shoppers who will see some great deals on outgoing models in the coming weeks,” Edmund’s analyst Jessica Caldwell noted.