Auto sales are beginning to recover momentum after the pandemic-related shutdowns of the second quarter. The market hit bottom in April, but sales began picking up once mandatory shutdowns eased. Auto manufacturers have been successful in ramping up production and are working to increase inventory.
Ward’s Intelligence and ALG Inc. estimate that the seasonally adjusted annual rate for sales in July was 14.0 to 14.5 million units.
“The increase in COVID-19 cases across the country has caused states such as Texas, Florida and California to take steps back in their economic re-openings. Despite this trend, we are not seeing automotive sales drop as low as they did in the spring at a national level,” said Eric Lyman, chief industry analyst for ALG, a subsidiary of TrueCar. “In fact, even with the low new vehicle inventory levels that we are noticing across many popular models, we’re seeing sales continue to bounce back.”
Retail sales are expected to fare better than fleet sales. ALG estimates that fleet sales for July declined 40 percent from a year ago. Retail sales are estimated at down 15 percent year-over-year and up 6 percent from June. Most auto manufacturers have move to quarterly results making monthly data imprecise.
Average prices for new vehicles slipped approximately 0.6 percent or $229 from June, estimates ALG, but were 3.3 percent or $1,172 higher than a year ago.
“While average transaction prices continue to tick up each month when compared to the same period last year, we ‘re seeing a slow decline in transaction prices month-over-month since May as manufacturers slowly pull back incentives and inventory levels shrink for certain models,” said Lyman.
Second-quarter earnings reports from U.S. steel producers and distributors reaffirmed that the auto industry is successfully ramping up production. Order books have picked up and anecdotal reports indicate that automakers are running at or near pre-COVID-19 levels.
The annual forecast for 2020 auto sales is in the 14 million range compared to recent years of 17 million or more.
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