Auto Sales in July 2019 Show Modest Improvements Provide Incomplete Picture
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In the automotive industry, July 2019 saw a mix of positive and concerning trends as sales figures, prices, and deals took shape. Here's a breakdown of the key developments.
New car sales saw an approximate 2.2% increase compared to the same month in 2018, reaching 1.39 million units. However, overall new light-vehicle sales decreased by 1.4% year-to-date. Despite the slight increase in new car sales, the seasonally adjusted rate (SAAR) for new light-vehicle sales in July 2019 was 16.82 million, a slight dip from the previous year.
Among the major car brands, Volkswagen (VW) and Hyundai posted significant gains. VW reported a 2.2% increase in sales, while Hyundai saw a 12.1% surge. Toyota and Honda also experienced growth, with Toyota recording a 0.4% increase and Honda a 2.5% rise in sales.
However, not all brands fared well. Nissan experienced an 8.9% decrease in sales, and the search results did not provide information on which car brand had the largest decrease in new car registrations in July 2019.
One notable trend in the market is the growing preference for used vehicles. Used cars are currently $15,000 less than new cars on average, and consumers are increasingly looking for better deals, including incentives on 2018 models and increased demand for used vehicles.
As the year winds down, dealers and automakers are responding to these trends by increasing the number of deals on new 2018 models. In fact, the number of 2018 models sold in July 2019 was the highest ever recorded by Edmunds since 2002, with 3% of new cars sold being 2018 models.
Another concern for dealers and automakers is the rising transaction prices. The average transaction price for a new vehicle in July 2019 was $37,030, an increase of almost $2,000 compared to 2015. Average monthly payments for a new vehicle also increased, with buyers paying over $100 more per month compared to four years ago, amounting to $556 in July 2019.
However, there is a silver lining as we move into the final quarter of 2019. As dealers try to free up space on dealership lots for 2020 models, consumers could see more attractive sales events. Additionally, the Federal Reserve's decision to decrease interest rates in July 2019 could make car purchases more affordable for thirty-five percent of shoppers, as interest rates fell below 4 percent.
In conclusion, the automotive market in July 2019 showed a complex picture of growth, declines, and shifting consumer preferences. As we move into the final months of the year, dealers and automakers will need to adapt their strategies to meet consumer cost expectations and navigate a tighter economic landscape.
