WESTLAKE VILLAGE, Calif. (Aug. 20, 2009) — August new vehicle retail sales are forecasted to cross the 1 million unit mark for the first time in the past year, thanks to the Cash for Clunkers program, J.D. Power and Associates said.
Based on the first 13 selling days of the month, new vehicle sales for August are expected to come in at about 1.03 million units, up nearly 2 percent from a year ago. New vehicle sales in July hit 878.900 units.
J.D. Power said the August sales mark the first increase in retail sales volume since June 2007.
The government-funded Car Allowance Rebate System (CARS) program—better known as Cash for Clunkers—gathers real-time transaction data from more than 10,000 dealerships across the U.S.
“Improved consumer confidence and credit availability during the past six months have combined with the CARS program to lift industry sales out of their slumping year-to-date levels, which have been down approximately 35 percent year-over-year,” said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. “These factors set the foundation for a gradual recovery in the months ahead. Reduced inventories will likely hold back some of this momentum, but the auto makers are moving quickly to ramp up production and rebuild stock.”
As inventory is channeled to retail sales, August fleet sales are expected to decline by more than 50 percent compared with a year ago. As a result, August total light vehicle sales are projected to come in at 1.1 million units, down 8 percent from August 2008.
The August seasonally adjusted annualized rate for total vehicle sales rose to 12.2 million units, up 1.2 million units from July.
J.D. Power and Associates is raising its 2009 new vehicle forecast to 10.3 million total units. Retail sales are projected to be 8.6 million units—300,000 units more than previous estimates—while the projection for fleet sales has been reduced to account for a shortage in inventory.
However, in light of the expected pull-ahead sales as a result of Cash for Clunkers and a flatter-than-expected recovery, the research firm has lowered its 2010 forecast slightly to 11.5 million total units and 9.5 million for retail sales.