WASHINGTON–Vehicle auto sales climbed again during August, but remain off their pace of one year ago as result of the ongoing pandemic.
According to figures released by the Commerce Department, the August numbers reflect the fourth straight month auto vehicle sales have increased. But vehicles sold during August remain 11% below where they were during August of 2019. Transaction prices slipped slightly in August compared to July as well, despite a nearly 4% increase over last year's average. There were two fewer selling days in August this year, contributing to reported declines, noted Reuters.
Toyota reported its U.S. new vehicle sales were off 23% in August over one year earlier.
According to an analysis released by Cox Automotive, “the story in August, as it has been all summer, was about low inventory levels holding back a more robust sales recovery. The month began with 26% less new-vehicle inventory on the ground versus last year: 2.33 million vehicles in dealer stock versus 3.12 million in early August 2019. With demand remaining relatively strong and inventories low, many automakers have been throttling back incentives to improve their margins. With lower cash incentives available, many would-be buyers are dropping out of the market, not able to find the product or the deal they’re looking for.”
Reason for Optimism
NAFCU’s chief economist said there is reason for optimism.
“Vehicle sales extended their recovery, rising for the fourth straight month since bottoming out. Nevertheless, sales remain 11% below prior-year levels,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Low gas prices and interest rates are tailwinds, but ones which are buffeted by tight inventory and growing unemployment. In addition, dealers are reporting more shoppers are facing financing constraints.
“The recovery in the auto market has been far more modest than in the housing market, where high-income households flush with cash and eager for larger homes are driving sales well above year-ago levels. NAFCU expects auto sales gains to slow as pent-up demand is fully exhausted and permanent job losses grow.”