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Smoke on Cars

Auto Market Weekly Summary


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Article Highlights

  1. New-vehicle sales rose in August on robust fleet orders.
  2. Price growth slowed; incentives more than doubled from a year ago.
  3. Used-vehicle sales, especially CPO, are hot.

New-vehicle sales rose slightly in August and were up double-digits compared to a year ago. The seasonally adjusted annual rate of sales (SAAR) declined to 15.0 million from 15.7 in July. Sales into fleet and increasing incentives contributed to the gains. Both sales to rental fleets and incentives doubled.

The used-vehicle sales performance compared to last year improved in August for the best year-over-year performance since February. Wholesale used-vehicle values increased slightly in August, breaking a four-month skid. Wholesale prices are down 7.7% from a year ago.

New-Vehicle Sales Rise on Strong Fleet Growth

Total new-light-vehicle sales were up 17.1% in August compared with a year ago, with one more selling day compared to August 2022. By volume, new-vehicle sales were up 2.2% from July to August. The August SAAR was 15.0 million, a 13.6% increase from last year’s 13.2 million but down 4.5% from July’s 15.7 million.

A strong increase in fleet sales again supported the growth in July, but the gains year-over-year are slowing modestly. Combined sales into large rental, commercial, and government fleets were up 34% from a year ago. Sales into large rental fleets were up 102% from a year ago. Sales to commercial fleets were up 1.2%. Sales to government fleets were up 39%.

Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be up 13.9%, leading to an estimated retail SAAR of 12.6 million, which was up 0.9 million from last year’s pace and down 0.6 million from last month’s 13.2-million pace. The fleet share of 15.6% was a 2.2 percentage point gain compared to last year’s share of 13.4% but was a 0.4% decline from last month’s 16.0% share.

Vehicle Price Growth Slowed, Incentives Rose

A new vehicle’s average transaction price (ATP) in August increased only 0.6% from July at an initial estimate of $48,451. The average price lost further ground on the average MSRP, falling to 99.1%, the lowest level since May 2021. The average price was up 0.1% from a year ago, while the average MSRP increased 0.6% in August from July and was up 2.3% from a year ago. [Check back in the Newsroom on Sept. 12 for the full ATP report.]

Manufacturers’ average incentive spending increased 10.3% to $2,365, up 113% from a year ago. Incentives as a percentage of average transaction price increased to 4.9%, the highest level since September 2021.

Used-Vehicle Sales, Especially CPO, Are Hot

Our used retail sales estimates based on Cox Automotive vAuto data indicate that sales volumes were up 5% in August compared to July. Volumes were up 0.8% from a year ago for the best year-over-year performance since February. CPO sales again saw a strong performance, up 15% from a year ago and up 5% from July to August.

As the used retail market gained momentum this summer and reversed the underperformance from this spring, wholesale vehicle value also turned around, according to the Manheim Used Vehicle Value Index. The index increased 0.2% in August on a seasonally adjusted basis after declining 1.6% in July, 4.2% in June, 2.7% in May and 3.0% in April. The increase in August led the index up to 212.2, down 7.7% from a year ago. The unadjusted price change in August was an increase of 0.9%, leaving the unadjusted average price down 7.5% from a year ago.

Initial Jobless Claims Declined as Labor Market Remains Strong

Seasonally adjusted initial jobless claims declined by 13,000 for the week ending Sept. 2. That was 1,900 more than in 2020 before the pandemic began.

Non-seasonally adjusted initial claims declined by 3,200 and were 55,000 lower than before the pandemic. Continuing claims, representing people who previously filed and remain on traditional unemployment compensation, fell by 40,000 from the previous week, moving the total down to 1.68 million as of August 26. Continuing claims were 208,000 lower than before the pandemic and the lowest level in 29 weeks.

The broadest measure of continuing claims declined by 13,000 to 1.81 million in the latest data, which lags the traditional number and is not seasonally adjusted. That total measure is down 37,000 over the last four weeks and is 288,000 lower than the pre-pandemic level.

The labor market is not as strong as it was a year ago, and claims have increased in 2023, but continuing claims are declining again, remain low, and do not represent significant stress in the labor market.

Jonathan Smoke
Chief Economist

Jonathan Smoke leads Cox Automotive’s economic and industry insights team, which tracks key metrics and trends impacting both the wholesale and retail markets for vehicles informed by the proprietary data from the company’s businesses and platforms. For 28 years, Smoke has focused on translating data and trends into relevant actionable insights for the industries that represent the biggest purchases that consumers make in their lifetimes: real estate and automotive. Smoke joined Cox Automotive in 2017.

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