Extreme weather in Southern California and Florida and a holdout for Labor Day deals contributed to a softer-than-expected U.S. new-vehicle market in August.
Business was up around the industry, with auto sales totaling 1.33 million vehicles for the month, a 17 percent increase over August 2022, according to a preliminary report by Global Data. For the seven automakers that report monthly U.S. sales, volume increased 12.5 percent over the year-ago month, according to Automotive News Research & Data Center.
The results track with volumes reported by the industry over the past six months, but signs indicate the market could be contracting.
The seasonally adjusted annual rate of sales for August was 15.17 million, according to Motor Intelligence. That figure came in below forecasts and down from July's 15.9 million pace, but far above the August 2022 SAAR of 13.4 million.
Year-over-year growth will start to appear weaker moving closer to December because last August is when inventory started to recover following the post-pandemic disruptions, Charlie Chesbrough, Cox Automotive senior analyst, told Automotive News.
"We are expecting a slowdown with higher interest rates, less credit availability and pent-up demand from the pandemic that already has been satisfied," Chesbrough said, noting that industry sales will not get back to 17 million levels anytime soon.
Though SAAR remained over the 15 million mark, the baseline each month this year, Global Data adjusted its 2023 forecast downward to 15.3 million units from 15.4 million. The firm said the real possibility of a UAW strike and its potential impact on inventory stockpiles was a factor.
Fleet sales outpaced the retail market and supported much of the growth in August. The fleet market share was estimated to be 15.6 percent — an increase of 2.2 percent over last year's share but a decrease from 16 percent in July — as automakers relied on more plentiful inventories to fill backlogs to fleet clients.
J.D. Power and GlobalData said retail inventory levels in August had risen to about 1.3 million vehicles, an increase from July and up 48 percent compared with August 2022. The figure was still well below pre-pandemic levels, however.
Macro headwinds, such as elevated transaction prices and high interest rates, continue to sideline price-conscious buyers, but more choices at dealerships and a return to incentives are nudging the market along.