ARLINGTON, Va.—Total vehicle sales fell for the second straight month in August to a rate of 16.7 million annualized units, but were up 0.8% from the depressed sales figures – as a result of Hurricane Harvey – a year ago.
NAFCU Research Assistant Yun Cohen attributed the slowdown in part to higher interest rates and reduced incentives.
"According to news sources, General Motors' sales reportedly dropped 13% in August as the company lowered incentive spending by more than $800 per vehicle compared to last year," Cohen said in a NAFCU Macro Data Flash report. "Despite fewer units of vehicles sold, manufacturers' profits are benefitting from higher average transaction prices as sales continue to shift from cars toward more expensive light trucks."
Sales of light trucks increased from 11.5 million to 11.6 million annualized units during the month – Cohen noted that August was the sixth consecutive month where light truck sales accounted for more than two-thirds of total units sold. Car sales decreased from 5.3 million to 5.1 million annualized units.
Other Factors
In addition to interest rates and incentives, Cohen outlined a number of other factors that could keep auto sales on a decline.
"Sales currently face several headwinds, including waning demand, higher borrowing costs, tightening access to credit and increasing competition from the used-car market," Cohen said. She added that "potential tariffs on auto-related imports could inflate costs and further dampen sales."
Fiat Chrysler Automobiles' sales were 10% higher in August compared to a year ago, followed by Ford (+4.1%), Nissan (+3.7%) and Honda (+1.3%). Toyota's sales were down 2% versus last year. General Motors' monthly sales figures are not yet available.