Improved Inventories Boost December Sales
Dealer profits still high, though fewer units marked above MSRP.
Retailer per-unit profit was forecasted to be down about 20% year-over-year due to reduced dealer markups above MSRP but more than double 2019 figures.
IMAGE: Getty Images/skynesher
December U.S. new-vehicle sales are projected to be up 5.3% year-over-year to 1,254,700, according to a J.D. Power-LMC Automotive forecast.
The combined retail and nonretail sales will occur over the same number of selling days year to year.
The forecasters also see seasonally adjusted quarterly sales up year-over-year by 9.6% to 3,549,800.
Annual sales, though, will be down 8.4% to 13,687,000.
Retail sales alone are projected to have fallen in December, down 2.8% year-over-year to 1,039,200, and for the year, down 11.3% to 11,648,200. Quarterly retail sales are forecasted to be up 1.3% to 2,938,500.
Though retail new-vehicle inventory is improving and therefore boosting sales, finishing its third consecutive month at more than a million units, it still falls short of demand, said J.D. Power Data and Analytics Division President Thomas King.
King said sale prices hit a record high for December, despite slightly increased shopper sensitivity to markups over MSRP, and that dealer per-unit profitability is still nearly double prepandemic levels.
“New-vehicle transaction prices continue to rise—albeit at a slower pace than earlier this year,” King said in a press release, pointing out that the average December price in December was on target to set a record $46,382, up 2.5% year-over-year.
Total retailer per-unit profit was forecasted to be $4,144, down about 20% year-over-year due to reduced dealer markups above MSRP but more than double 2019 figures. For the month, 37% of new vehicles were sold above MSRP, down from 50% in July.
Originally posted on Auto Dealer Today
More Auto Finance
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Auto Lenders, Consumers on a Tightrope
April borrowing data shows that more consumers are bending over backward to buy vehicles, though subprime lending cooled off for the month.
Read More →
Toyota Financial Services President Replaced
Scott Cooke has served in various roles with Toyota Financial Services for over 20 years, including president and CEO, which he retires from on June 30.
Read More →