J.D. Power: ‘Slight Pause’ in Recovery

By Staff Writer July 28, 2020

New-vehicle retail sales in July are expected to be down from a year ago, according to a joint forecast developed by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,133,300 units, a 4.0 percent decrease compared with the J.D. Power pre-virus forecast and a 9.5 percent decrease compared with July 2019. Reporting the same numbers without controlling for the number of selling days translates to a decrease of 5.9 percent from a year ago. (Note: July 2020 contains one additional selling day than July 2019.)

“July represents a slight pause in the overall recovery, with retail sales down 4-5 percent compared with the J.D. Power pre-virus forecast for the second consecutive month,”  said Thomas King, president of the data and analytics division at J.D. Power.

Among the top 100 U.S. markets, just eight of them are expected to post year-over-year sales gains. Notable markets among those expected to show gains include Detroit, Buffalo and Milwaukee.

“One factor contributing to the pause in recovery in July is inventory constraints for many vehicles,” King said.

This month, 41 percent of all vehicles sold will spend fewer than 20 days on dealer lots, up from 35 percent a year ago.

Incentive spending continues to fall from the record levels of April but remains up slightly from a year ago. Spending is on pace to reach $4,236 in July, an increase of $166 from July 2019. Reporting spending expressed as a percentage of the average vehicle MSRP is 10.3 percent, nearly flat from last year.

The shift in consumer demand toward more expensive trucks/SUVs continues to support record transaction prices in July. For the fourth consecutive month, trucks/SUVs are on pace to account for 76 percent of retail sales. As a result, transaction prices are expected to rise by 5.9 percent to $35,151, the highest ever for the month of July and second-highest level ever.

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Last modified on Wednesday, 29 July 2020 14:00