IRVINE, Calif. — New-vehicle sales are expected to decrease 0.7% year-over-year to a total of 1.49 million units, resulting in an estimated 16.5 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book.

Although sales are down from a raw volume perspective, they remain up slightly after adjusting for the difference in selling days in August 2014 versus August 2013. The SAAR for August 2014 is up from 15.9 million in August 2013 and up from 16.4 million in June 2014.

“Although growth has slowed, sales remain steady and on pace to end the year strong,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “Growth is expected to continue to soften, so we wouldn’t be surprised to see automakers increase their incentive spending.  Spending was restrained for the first part of the year, and has crawled upward in recent months.  Sales also will be boosted by the Labor Day weekend, which is traditionally one of the strongest weekends of the year for vehicle sales.” 

KBB’s Estimated August 2014 Sales Forecast also shows that during the month, retail sales are expected to account for 89% of volume.

According to KBB, the Chrysler Group continues its impressive run in 2014 with double-digit growth in August.  The Jeep brand has been especially strong, becoming Chrysler Group’s highest selling and the industry’s fastest growing brand.  Much of Jeep’s success is due to the Cherokee, which launched late last year. Due to one fewer selling day this year, KBB anticipates most of the major manufacturers to remain flat or post minimal declines year-over-year. 

Both compact and mid-size SUVs/crossovers continued to be the strongest vehicle categories in August. This year, compact and mid-size SUVs/crossovers are responsible for nearly 60% of the industry’s growth, as two of the fastest selling segments. Compact SUVs/crossovers average 49 days to turn, while mid-size SUVs/crossovers average 61 days, both just slightly higher than this time last year. 

“The mid-size car segment continues to lose steam this year,” Gutierrez said. “Sales on the year are down 2%, average transaction prices are down 1%, while incentive spending is up nearly $500 per unit. Recently redesigned models such as the Hyundai Sonata and Chrysler 200 will face challenges in this highly competitive segment.”