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SOURCE J.D. Power
Incentive Spending on Track to Set Another Record High
DETROIT, Dec. 22, 2017 /PRNewswire/ -- For the eighth time this year, the new vehicle retail sales pace in December is expected to fall from year-ago levels, according to a forecast developed jointly by J.D. Power and LMC Automotive. The seasonally adjusted annualized rate (SAAR) for retail sales is expected to be 14.6 million units, down 350,000 from a year ago. Retail sales are projected to reach 1,305,800 units, a -2.6% decrease on a selling day adjusted basis compared to December 2016.
"While 2017 retail sales will be below 14 million units, the year will still rank as the eighth-best retail sales year in history and only a modest 280,000 units below the 14.2 million sold in 2015," said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. "The larger concern remains the elevated incentives being used to drive the current sales pace." Month-to-date in December, average incentive spending per unit has reached an all-time high of $4,302, passing the record of $4,188 set in November and well above the $4,001 spent in December 2016.
J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons
New-Vehicle Retail Sales
(-2.6% lower than December 2016)2
Total Vehicle Sales
(-2.0% lower than December 2016) 2
14.6 million units
13.6 million units
15.0 million units
17.8 million units
17.5 million units
18.1 million units
1Figures cited for December 2017 are forecasted based on the first 14 selling days of the month.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said, "As 2017 comes to a close, the pullback from the 2016 level is settling at 300,000 units, with more than half of that from the much smaller fleet market. Retail demand, propped up with high incentives, has been held to only a slight decline. However, SUV demand has been robust and is expected to finish up 5% in 2017 from 2016 and a market share of 43% of total light-vehicle sales. The SUV reign will continue for the forseeable future. SUVs are expected to account for 50% of new model activity in 2018, which will help push the share of total sales to 45% and continue the segment's volume growth, even as the total market is projected to contract further in 2018."
LMC's forecast for 2017 total light-vehicle sales is holding at 17.2 million units, a decrease of 1.9% from 2016. Retail light-vehicle are expected to finish the year just below 14.0 million units, down 1.1% from 2016. Looking forward to 2018, total light-vehicle sales forecast remains at just under 17.0 million unit a decline of 1.2%. The forecast for retail light-vehicles is at 13.8 million units for 2018, a decline of 1.4%.
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power or LMC Automotive. www.jdpower.com/corporate www.lmc-auto.com
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