ARLINGTON, Va.—Total vehicle sales decreased in July to a seasonally adjusted rate of 16.8 million annualized units. NAFCU Research Assistant Yun Cohen attributed part of the slowdown to
higher interest rates and reduced incentives.
Cohen pointed to an estimate from J.D. Power that shows incentive spending declined year-over-year for the first time in 54 months in July.
Car sales decreased from 5.5 million to 5.3 million annualized units during the month; sales of light trucks declined from 11.8 million to 11.5 million annualized units.
"The average transaction price reached a record high of $31,561 as purchases continued to shift from cars toward more expensive light trucks," Cohen said in a NAFCU Macro Data Flash report. "July marks the fifth consecutive month where light truck sales accounted for more than two-thirds of total units sold."
According to data from Autodata Corp., monthly sales levels were down 0.1% from a year ago.
Downward Trend Expected
Fiat Chrysler Automobiles' sales were 5.9% higher in July compared to a year ago. Nissan's sales were down 15.2% versus last year, followed by Honda (-8.2%), Toyota (-6.0%) and Ford (-3.1%). The declines were in part due to one less selling day compared to last July. General Motors' monthly sales figures are not available, Cohen said.
"Overall, vehicle sales are expected to trend down in the second half of 2018," Cohen said. "New vehicle sales currently face several headwinds including higher borrowing costs, tightening access to credit and increasing competition from the used-car market.
"The recent slowdown in residential construction could dent demand for trucks. In addition, potential tariffs on auto-related imports could inflate costs and further dampen sales," she added.