Product Rules, Incentives Don’t, Says TrueCar

Light vehicle sales, including Fleet, are expected to reach 1.077 million units in August, up 8 percent from last August and 2 percent from July, according to TrueCar. The car pricing and trends Website’s forecast has new-car sales pacing at 12.2 million a seasonally adjusted annualized rate, which is flat from July.

“The auto industry is a mixed bag this year, due to economic uncertainty. Sales have improved compared to last year, but nowhere near the potential we had expected,” said Jesse Toprak, vice president of industry trends and insights for TrueCar.com. “The strongest correlation to new car sales is the Dow Jones Industrial Average and it was shaky and nervous in August.”

Retail sales are up 4.9 percent compared to last year and up 3.1 percent on a month-over-month basis. TrueCar.com anticipates fleet and rental sales to make up 20 percent of total industry sales this month, while the industry average on incentive spending per unit will increase three percent on a month-over-month basis to $2,663. Incentives, according to the TrueCar, is expected to decrease 3.9 percent from August 2010.

Used-car sales are estimated to be 4.128 million units, representing a 4.7 percent year-over-year and an 8.2 percent month-over-month decrease. Additionally, TrueCar estimates that the industry sold four used cars for every new vehicle sold in July.

“Product is king, not incentives, and this month really proves that,” said Kristen Andersson, automotive analyst at TrueCar.com. “Sales of Hyundai/Kia are up nearly 24 percent from last year, while incentives dropped by 26 percent. But on the other end of the spectrum, Toyota sales are down nearly 14 percent, even as they increased incentives by 18 percent.”

Forecasts for the top seven manufacturers for August 2011: