U.S. New Vehicle Sales Drop in September

(Reuters) – New vehicle sales in September in the United States are projected to fall 1.8% from a year ago, partly due to three fewer selling days, a report by industry consultants J.D. Power and GlobalData showed on Thursday.

Seasonally adjusted annualized rate (SAAR) sales of new vehicles are expected to remain steady at 15.8 million units, according to the report.

Why It Is Important

Rising inventories are leading to larger discounts from both manufacturers and retailers, resulting in falling transaction prices.

The industry continues to be affected by reduced leasing activity from three years ago. Fewer leases signed back then mean less return of lessees to dealers for new vehicle purchases or leases.

By The Numbers

Total new-vehicle sales for September, including retail and non-retail transactions, are expected to decline 1.8% at 1,164,900 units compared to last year.

Without adjusting for selling days, this translates to a 13.2% decrease from 2023.

Transaction prices are trending towards $44,467, down $1,296 or 2.8% from a year earlier, while the average incentive spend per vehicle has increased by 63.2%.

Total retailer profit per unit, which includes vehicles’ gross plus finance and insurance income, is projected to be $2,249, down 29% from September 2023.

Key Quotes

“In September, the interest in EVs by new-vehicle shoppers reached a low point for the year. Just 21.7% of new-vehicle shoppers said they were ‘very likely’ to consider an EV for their next new-vehicle purchase, a 4.2-percentage-point drop from a year ago,” said Elizabeth Krear, vice president of electric vehicle practice at J.D. Power.

“While the rate adjustment is a positive for the industry, the effect will be neither immediate nor linear in improving vehicle affordability for consumers, reducing the cost of low APR deals for manufacturers, or helping retailers with floorplan expenses,” said Thomas King, president of the data and analytics division at J.D. Power.