The annualized U.S. sales rate for August is tracking above 15.5 million units, fueled by strong replacement demand, cheap and available credit, and a calendar quirk, forecasters say.
U.S. sales pace in August projected to top 15.5 million, analysts predict
Close-out deals, pent-up demand, low finance rates continue to stoke demand
Three of four major independent forecasters expect a modest decline from the robust selling pace of 15.9 million units in June and 15.8 million in July: TrueCar.com at 15.75 million, Kelley Blue Book at 15.6 million and Wells Fargo at 15.5 million-15.6 million.
But a joint forecast by J.D. Power and Associates and LMC Automotive projects monthly sales will hit the 16 million level for the first time since late 2007.
The average seasonally adjusted annualized rate of the four forecasting groups is 15.7 million. That would be well above the 14.5 million SAAR of August 2012.
Automakers are scheduled to report August U.S. sales results on Sept. 4.
'Operating on auto pilot'
"The U.S. auto recovery seems to be operating on autopilot, a welcome stage of stability at a higher pace," said Jeff Schuster, senior vice president of forecasting at LMC Automotive, adding that the Labor Day weekend will be counted in August this year instead of September.
"We do expect to see a lower selling rate in September as Labor Day is counted in August sales," he said.
Close-out deals on 2013 models are also stoking demand, analysts say.
Auto sales have remained strong despite recent weakness in U.S. financial markets, TrueCar.com analyst Jesse Toprak said.
"New vehicle sales defied their typical strong correlation with Wall Street in August and continued to post a healthy increase despite the lackluster [market] performance," he said.
Even low incentives aren't slowing sales, Toprak noted. TrueCar.com estimates the industry average per-vehicle incentive at $2,477 in August, down fractionally from a year ago and off 3 percent from July.
August sales might be even higher if some manufacturers didn't have short supplies of popular models, said analyst Alec Gutierrez of Kelley Blue Book. He specifically cited Ford, Subaru and Hyundai.
"Most automakers are seeing double-digit increases [in August] as retail sales remain a bright spot, even with more new models entering the market," Gutierrez said.
J.D. Power/LMC forecasts U.S. buyers will spend $36 billion on new vehicles in August, the highest total in its records. It also expects robust August retail sales of 1.27 million units, up 12 percent from a year ago and the highest monthly unit volume since 2006.
'Best month' in 7 years
"August is looking to be the best month for retail sales that we've seen in seven years," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "Moreover, this is occurring when consumers are spending more on new vehicles than any month on record, a further indication of the underlying strength of the sector."
Both J.D. Power and Kelley Blue Book said U.S. light-vehicle sales remain on track to reach 15.6 million units for the full year, which would mark the fourth straight year with a million or greater unit increase in volume. In 2012, U.S. sales were 14.5 million.
U.S. light-vehicle sales have climbed 8 percent this year through July to 9.13 million units.
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