July auto sales based on mid-month totals look grim despite record incentives. Industry analysts J.D Power and LMC estimate U.S. July auto sales down 5 percent.
Declining sales will pad the already large inventory numbers piling up on dealers lots.
DETROIT (Reuters) – U.S. auto sales in July likely fell a little more than 5 percent from the same month in 2016, a fifth consecutive month of declining sales and the largest monthly drop so far this year despite persistently large consumer discounts, industry consultants J.D. Power and LMC Automotive said on Thursday.
LMC cut its full-year 2017 forecast for new vehicle sales for the fourth consecutive month, to 17.0 million units from its previous forecast of 17.1 million.July U.S. new vehicle sales will be about 1.44 million units, a drop of more than 5 percent from 1.52 million units a year earlier, the consultancies said.
The forecast was based on the first 18 selling days of July. Automakers will release U.S. sales results for the month on August 1.
The seasonally adjusted annualized rate for the month will be 17.2 million vehicles, down nearly 4 percent from 17.9 million units in the same month in 2016.
Retail sales to consumers, which do not include multiple fleet sales to rental agencies, businesses, and government, were also set to decline more than 5 percent in June.
Consumer discounts hit a monthly record of $3,876, above the previous record of $3,597 set in July 2016.
Despite the high level of consumer discounts, the average new vehicle sold in July had spent 72 days in inventory. This was the highest level since 2009 during the height of the Great Recession.
Advance Inventories
Earlier today I commented “This inventory build is unwarranted in light of actual retail sales. These numbers will likely boost second quarter GDP substantially. Expect a substantial payback in the third quarter.”
Related Articles
- Inventories Surge Led by Autos, Trade Deficit Narrows: A Boost to Second-Quarter GDP
- 131% Surge in Civilian Aircraft Orders Propels Durable Goods Report: Diving Into the Details
Mike “Mish” Shedlock
Post from previous article—Keep building that automotive inventory…There’s plenty
of parking available at the Sea of Tranquility…
Wonder how much of the off lease inventory is being sold overseas?
Slightly outdated
https://www.usitc.gov/publications/332/executive_briefings/coffin_used_vehicle_exports.pdf
shows roughly a third of exports are used. There is a larger report by same author titled “Examining Barriers to Trade in Used Vehicles”.
Meanwhile Canada exports around 1/8th of used autos to US that US exports to world.
http://www.marketwired.com/press-release/canadian-used-vehicle-exports-surge-scotiabank-2064526.htm
Price of new cars is just too high. Average price per car in April was $33,560. Loan lengths are being stretched out to 72 or 84 months to make the payment “affordable.” Why buy a new car when either: your car is working fine; or late model used cars are a lot cheaper.
THE 4 HORSEMEN leading the charge of the coming financial apocalypse:
Auto sales
Retail sales
Obamacare
Housing
You forgot the cost of medical care, increasing 9% a year. The plunder will continue until collapse…
AND: OBAMACARE ISN’T MEDICAL CARE?
Obama care is insurance, medical care is the doctors, nurses and hospitals. There are two levels of fraud going on simultaniously.
….and Medical Care Providers are exiting the field in massive numbers……from all I’ve read and heard…..
Ford has been way ahead of this curve. Planned longer than normal shutdowns at most of their plants. DSO on dealers is only 66 days.
for the ones that manage this downturn well, it will be hugely rewarding with billions in free cash flow spinning off like confetti. They be perfectly poised for the big change in 2019-2021 when level 4 goes retail
It’s no wonder Auto sales are in the tank..$50-60,000 for a new pickup? Most people look at the sticker and just shake their heads.. If they want to sell these things maybe knock about $20-30,000 off the sticker and watch’em fly off the lot, and while they’re at it get rid of the UAW, that’s half of the big three’s problem,
Reblogged this on World4Justice : NOW! Lobby Forum..
Any negative statistic that is worse than during the “Great Recession” should alert readers to the possibility something worse than a recession is just around the corner.
That’s just silly. The stock market is at record highs.
Nothing can possibly go wrong now. The proof is that nobody “important” sees ANYTHING coming.
Go out and borrow and spend with confidence as the smart people at the FED have got us covered.
Here is another interesting article, that also ties in to the deflation theory
https://econimica.blogspot.pt/2017/07/why-treasury-market-and-everything-else.html#gpluscomments
As in who will be buying new government debt, from where.
This writer http://thesoundingline.com/financing-us-debt-post-qe/
thinks that excess reserves may be used.
Either way, it seems something is afoot.
Anyone have any ideas how this is planned out, possible to resolve, if even current treasury figures are credible?
that is worse than during the Great Recession should alert readers to the possibility something worse than a recession is just around the corner….
Its coz everyone is saving up for electric automaton vicles, an there gonna av twenny year investory sat in the lot by then. U aint seen nothin yet far as stackin products is concernd.
I am not concerned with the future of new automobiles since I will never buy one again. Leasing is the future for overpriced autos and the secondary market for autos comin off leases will be brisk. Those buying new vehicles will drop further as more and more people lease.
World wide crisis similar to 1929, only much worst, the US was on the ascendency and it had no competition, to day world resoures are dwindling and he US has enormous competition .
Auto sales pretty much follow the business cycle. The “Trump effect” delayed the inevitable recession, but I believe it has already begun.
The Osborne Effect?
https://en.wikipedia.org/wiki/Osborne_effect
Look at all this neat stuff in the pipeline! We’ll have those electric car problems licked any day now! Level 5 self-drivers any day! Rent by the hour! Uber and Lyft will be cheaper than taking the bus!
If I didn’t have to deal with the VW diesel scandal I’d still be driving my 2011 VW. Instead I sold it back and bought a Jeep, but really don’t plan on buying another vehicle until version 3.0 of the self drivers are out there.
I almost bought a 2017 this week, but the deal fell through on a minor disagreement. My current car is 13 years old, single owner. I need another car. Only people with a real need will buy cars, and go with used ones where possible. Car are no longer casual purchases for most people.