July Auto Sales Pick Up Steam – Forbes
Forecasters expect July U.S. auto sales to reach nearly 1.5 million cars and trucks, an increase of around 10 percent from a year ago, which translates into a Seasonally Adjusted Annual Rate well above pre-recession levels and well above the 16 million unit benchmark for what the auto industry considers a successful sales year.
Edmunds.com said it expects a July SAAR of 16.8 million, which would be the highest in eight years. That’s based on a forecast of about 1,460,000 new cars and trucks for the month. Automakers report July sales on Friday, Aug. 1.
TrueCar Inc. has a similar forecast of 1,444,000 cars and trucks sold in July, for a SAAR of 16.7 million, also the highest since July 2006.
Kelly Blue Book weighed in with a similar July forecast of 1,465,000, which KBB says works out to a SAAR of 16.6 million.
The SAAR is an inexact science, a sales estimate for the whole year, based on the sales rate for a single month and historical results month by month. Auto sales are highly seasonal.
Monthly auto sales usually bottom out in January and February. Therefore, a forecast of nearly 1.5 million in January would imply an astronomical SAAR — much higher than the same volume in July.
July is generally one of the stronger sales months, leading up to the typical high point of the year in September and October, tied to the traditional model year changeover. Automakers introduce new models all year round, but the center of gravity for the model year changeover is still in the fall.
That’s when incentives on the old model year usually peak, and new models also stimulate demand.
Through the first half of 2014, total U.S. industry sales were 8,163,942, a more modest increase of 4.3 percent from the first half of 2013, according to AutoData Corp. June sales were up just 1.2 percent to 1,420,994, but that was better than many analysts expected.