Hyundai, Toyota, Mazda and others posted August U.S. auto sales in line with expectations today, and Subaru posted its best sales month of 2020, despite limited inventory. August sales results won’t be fully known for a few days, but early indications are that the results will land near the Cox Automotive forecast released last week. Overall, the seasonally adjusted annual rate (SAAR) of sales in August should be near 15 million, up from 14.5 million last month and an excellent result considering the SAAR was 8.6 million just 4 months ago. The sales results reinforce what auto dealers were saying in mid-August when nearly 70% of franchised dealers indicated that sales were returning to normal.
Cox Automotive Senior Economist Charlie Chesbrough noted, “Our initial take on August: The market recovery remains on track. There are headwinds holding back sales — limited inventories, fewer cash incentives – and those likely suppressed some activity as potential buyers could not find what they wanted. The industry is also wrestling with a shortage of MY2021 vehicles, which normally the OEMs would be rolling out at this time of year. The lack of fresh product likely kept some buyers on the sidelines. The inventory situation is going to take some time to improve, and when coupled with an ongoing pandemic and weak economy, vehicle sales could face a difficult period this fall.
Still, the selling rate in August demonstrates that there is base-level demand for new vehicles in the market and dealers are finding ways to close deals and deliver product. Most new-vehicle buyers – those from higher-income households – are likely less impacted by unemployment and economic uncertainty at this time, and they are willing to step into the market. Buyers on the margin, however, those with lower credit scores and fragile employment situations, will likely be out of the market for some time. The market is far from recovered, but considering the overall economic conditions, it is healthy.”
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