Total new-vehicle sales for July, including retail and non-retail transactions, are projected to reach 1,320,982 units, a 21.5% increase from July 2022, according to a joint forecast from J.D. Power and GlobalData.
July 2023 has 25 selling days, one less than July 2022. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 16.8% from a year ago.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.0 million units, up 2.6 million units from July 2022.
The Retail Sales Forecast
New-vehicle retail sales for July are expected to increase when compared with July 2022. Retail sales of new vehicles this month are expected to reach 1,083,906 units, a 15.2% increase from July 2022 when selling day adjusted. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 10.8% from July 2022.
The Takeaways
“July continues the prevailing theme of robust sales growth thus far in 2023, facilitated by amplified vehicle production and pent-up consumer demand," said Thomas King, president of the data and analytics division at J.D. Power. "July year-to-date total sales will be slightly more than 9.0 million units---an increase of 14.4% from a year ago, but still below pre-pandemic sales levels, which were north of 9.8 million. As sales volumes improve, the average new-vehicle retail transaction prices are declining modestly, down 1.9% from July 2022.
“Retail inventory levels in July are expected to finish around 1.3 million units, in line with June 2023 and a substantial increase of 63.7% compared with July 2022, but well below historical levels.
“Sales to fleet customers are still relatively elevated as manufacturers leverage higher vehicle production to allocate more vehicles to those fleet customers. Fleet sales are projected to increase 55.1% from July 2022.
“The increased vehicle supply and elevated interest rates have led to a decline in dealer profits---but those profits still exceed pre-pandemic levels. The total retailer profit per unit---which includes grosses, finance and insurance income---is expected to reach $3,533 in July," King said. "While this is 28.3% lower than a year ago, it is still more than double the amount in July 2019. The primary reason for the decline in profit is that fewer vehicles are being sold for prices higher than the manufacturer's suggested retail price (MSRP). This month, only 28.7% of new vehicles are projected to be sold above MSRP, which is down from 49.3% in July 2022.”
Total aggregate retailer profit from new-vehicle sales for this month is projected to be down 22.4% from July 2022, reaching $3.6 billion for the third-highest July on record.
Source: J.D. Power
Abby Andrews