August Auto Sales Are Down, But The Best Deals Are Down, Too
U.S. auto sales are expected to be down around 15% in August vs. the same month a year ago, part of a long, continuing recovery from coronavirus shutdowns in March and April.
For consumers, another result of the slow recovery is that the traditional fall model-year changeover — one of the best times of the year to get a deal on the expiring model year — still hasn’t gotten under way for many brands, analysts said.
For the month of August, sales statistics are also down because of a quirk in the calendar: Labor Day special discounts fall entirely in the month of September this year, unlike last year.
“There’s sort of a double-whammy for August,” between low inventories and no Labor Day deals, said Tyson Jominy, J.D. Power vice president, data & analytics, in a phone interview.
Dealerships are not feeling much pressure to make deals, with inventories low and vehicles selling almost as fast as dealerships can unload them off the delivery trucks, Jominy said. According to J.D. Power, nearly 45% of all vehicles sold in August will spend fewer than 20 days on dealer lots. That’s up from 35% last year.
According to a forecast from J.D. Power and LMC Automotive, U.S. auto sales in August are expected to be about 1.3 million cars and trucks, down about 14% vs. a year ago. That percentage change is adjusted for the fact that there are two fewer official selling says in August 2020 vs. August 2019. Just based on the raw numbers, sales for August 2020 would be down about 20%.
Forecasters at TrueCar’s ALG Inc. had a similar forecast for August. “We’re not seeing inventory coming back yet,” said Nick Woolard, director of OEM and Affinity Partner Analytics at TrueCar. (OEMs are Original Equipment Manufacturers. That is, automakers.)
“It’s been relatively flat the last couple of months. It’s starting to come back, but it’s still down about 1 million units,” he said,
Under the circumstances, Woolard said it’s a positive sign auto sales have come back as strongly as they have. Sales bottomed out in April, down 45%, he said.