US auto sales set to rise in August on Labor Day weekend surge, report shows

(Reuters) - New vehicle sales in the United States are projected to rise over 4% in August from a year ago, partly boosted by the Labor Day weekend falling within the reporting period, according to a joint report by industry consultants J.D. Power and GlobalData on Thursday.

On a seasonally adjusted annualized rate (SAAR) basis, which adjusts for Labor Day timing, sales are expected to stay roughly flat at 15.3 million units.

WHY IT IS IMPORTANT

Discounts from dealers and manufacturers are rising, while average transaction prices are falling, leading to a slight SAAR growth in August.

The industry is also grappling with the effects of reduced leasing activity from three years ago. Fewer leases signed back then mean fewer lessees are returning to dealers to purchase or lease a new vehicle.

J.D. Power on Wednesday forecast a slower-than-expected growth rate for EV sales in the first half of 2024 amid competition in the market for gasoline-powered models.

BY THE NUMBERS

Total new vehicle sales for August, including retail and non-retail transactions, are expected to be up about 4.2% to 1,437,954 units from a year ago.

Transaction prices are trending towards $44,039, down $1,895 from a year earlier.

Total retailer profit per unit - which includes vehicles gross plus finance and insurance income - is expected to be $2,249, down 33% from August 2023.

KEY QUOTES

"An increase in the transition to EVs will take time, with several interdependent variables affecting adoption," said Elizabeth Krear, vice president, electric vehicle practice at J.D. Power.

"The global demand recovery is showing signs of slowing, with lower volume tempering the outlook for the rest of the year," Jeff Schuster, vice president of research, automotive at GlobalData.

(Reporting by Aishwarya Jain in Bengaluru; Editing by Shreya Biswas)