New light vehicle sales in August are expected to be up double
digits from year-ago, while maintaining pace with July results
S&P Global Mobility expects US light vehicle sales in August
to remain steadfast in a challenging environment, with a volume
estimate of 1.34 million units. The projected August result would
be up 18% year over year, however compared to the month-prior
result, growth would be a milder 3% even with two more selling
days. This translates to a seasonally adjusted annual rate (SAAR)
of 15.2 million units, down from a July 2023 reading of 15.7
million units.
While the year-over-year growth in the market will be sustained
in August, there are some faint indicators of market softening. The
daily selling rate metric, since peaking at 54,500 sales per day in
April, has realized a mild downward trend since. With 27 selling
days in August, and an estimated volume of 1.34 million units, the
daily selling rate metric would fall below 50,000 units for the
first time since February 2023. S&P Global Mobility analysts
project calendar year 2023 total light vehicle sales of 15.4
million units. Although the daily selling rate has diminished over
the past three months, we do not expect this metric to further
decline over the remainder of the year.
“New vehicle affordability concerns will not be quick to
rectify,” reports Chris Hopson, principal analyst at S&P Global
Mobility. “Rising interest rates, credit tightening and new vehicle
pricing levels slowly decelerating remain pressure points for
consumers.”
In terms of total dealer-advertised inventories, volumes have
stayed relatively static since the beginning of July – at around
2.3 million units, with upward and downward variations of ~100,000
units over the course of a sales month, according to Matt Trommer,
associate director of Market Reporting at S&P Global
Mobility.
On a year-over-year basis, compared to mid-August 2022,
inventories have risen by 57% from just shy of 1.5 million
vehicles, Trommer said. (Note that total advertised inventory
figures include a fractional percentage of vehicles that dealers
may have sold but are still advertising, as well as vehicles
allocated to dealers but are still in transit.)
Various risk factors beyond the US consumer also remain
prevalent in the outlook for the remainder of 2023, including the
potential for North American vehicle supply disruptions as union
negotiations emerge.
“The greatest threat to the forecast in the near-term surrounds
the union negotiations between the United Auto Workers (UAW) in the
US and Unifor in Canada with their respective contracts set to
expire in mid-September 2023,” said Joe Langley, associate director
at S&P Global Mobility.
Continued development of battery-electric vehicle (BEV) sales
remains a constant assumption for 2023 although some month-to-month
volatility is expected. BEV share is expected to 8.0% of August
sales, remaining on trend with the preceeding month. Looking at the
remainder of the year, beyond potential future pricing developments
by Tesla, a sustained churn of new and refreshed BEVs and
aggressive BEV production expectations will continue to promote BEV
sales as the year progresses.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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- Source: http://www.spglobal.com/mobility/en/research-analysis/august-us-auto-sales-trends-remain-familiar.html
