BANDON, Ore. — Based on data collected during the first 20 days of July, CNW Research said this week it expects new-vehicle deliveries to rise 7 percent vs. one year ago.
New floor traffic was already up more than 4 percent heading into the last full week of July. Year to date, new floor traffic was 2.6 percent form a year ago. Closing rations were already up 3.3 percent vs. June, while same-store sales increase more than three percent in the first 15 days vs. one year ago.
Driving those increases were subprime approvals, which were up 7.6 percent vs. June. But CNW did note that approvals for credit-challenged customers are down year over year.
“But banks and lending institutions are tempering their subprime approvals,” wrote Art Spinella in his firm’s monthly report. “Compared to last year’s wild run up, subprime approvals are down [more than 1 percent]. This continues a trend CNW over the past few months and one likely to continue throughout the summer.”
Leasing is also on the rise, edging up 2.2 percent vs. July 2012. Year to date, leasing was up 1.5 percent. “This could be the best leasing year in nearly a decade as automakers push the alternative to financing,” Spinella noted.
Also driving sales are incentives, with Spinella spotting a possible incentive war on the horizon. “While manufacturers and dealers say they are holding back on incentives and spiffs to customers, the reality is something else,” he wrote. “Whether compared to last year or last month, automakers are adding incentive dollars to both increase floor traffic and help dealers close a sale.”