While it appears new-car sales are continuing to lose steam, Edmunds is projecting that used-vehicle sales in July should climb when compared to the previous month.
Edmunds is estimating that 3.4 million used vehicles will be sold this month, which would compute into an estimated seasonally adjusted annual rate (SAAR) of 39.2 million. For June, analysts had projected that used-vehicle sales would come in at 3.2 million.
Meanwhile, on the new-car side, Edmunds is forecasting that 1,423,097 new cars and trucks will be sold in the U.S. in July for an estimated SAAR of 16.9 million. This reflects a 3.1 percent decrease in sales from June and a 6.2 percent decrease from July of last year.
Edmunds also is estimating that retail SAAR will come in at 14.6 million vehicles in July, with fleet transactions accounting for 13.8 percent of total sales.
“July is historically a strong month, but with disappointing sales and inventories still building, something needs to give,” said Jessica Caldwell, Edmunds executive director of industry analysis. “A lot is riding on late-summer sales events to help move vehicles before 2018 models start arriving at dealer lots.
“Production slowdowns will help address some of the inventory issues, but consumers may be waiting for automakers to loosen the purse strings on incentives to get them to pull the trigger on making a purchase,” Caldwell continued.
The new-model sales projections are similar from Kelley Blue Book.
KBB is expecting new-vehicle sales to fall nearly 6 percent year-over-year to a total of 1.43 million units in July 2017, resulting in an estimated 16.7 million SAAR.
“The annual selling pace is expected to remain below 17 million SAAR in July, with volume dipping slightly from the levels seen in May and June 2017,” Kelley Blue Book analyst Tim Fleming said. “We’re in the midst of the steady summer sales months when new vehicles tend to stay relatively consistent after peaking during the Memorial Day weekend in May.
“Kelley Blue Book expects to see sales start to jump back up again in August and September thanks to model-year closeouts and the Labor Day holiday,” Fleming added.
KBB pointed out that July would represent the fifth month in a row where the industry would post an under-17 million SAAR, the longest period since a six-month streak from September 2014 through February 2015.
After a record year of sales in 2016 and seven consecutive year-over-year sales increases, Kelley Blue Book's forecast for 2017 calls for sales in the range of 16.8 million to 17.3 million units, which represents a 1 to 4 percent decrease from last year.
Kelley Blue Book added that analysts expect full-size trucks will likely post the smallest volume decline of the major segments thanks to strong demand from consumers and small businesses.
“New home construction, and the real estate market in general, has been steadily improving and has even surpassed pre-recession levels in some parts of the country,” Fleming said. “A strong real estate market, especially with regard to new home construction, in conjunction with low fuel prices, generous incentives and improved product offerings will help to keep truck sales strong.”