October 2024 Automotive Sales Forecast Highlights
Total new-vehicle sales for October 2024 are projected to be impressive, reaching 1,327,600 units. This reflects a 2.1% increase compared to October 2023, adjusting for the selling days in the month. With 27 selling days this October, a jump from last year's 25 days, the expected sales show a positive trend in the automotive market. Without adjusting for selling days, this marks a notable 10.3% increase from last year.
Retail Sales Insights
Retail sales of new vehicles are set to witness a substantial rise in October 2024, forecasting 1,136,700 units sold. This indicates a 5.9% increase from October 2023 when adjusted for selling days. Without adjustments, the growth is even more significant, anticipating a 14.3% rise in retail sales. The market appears to be favoring retail sales more than fleet sales in this period.
Key Takeaway — Thomas King from J.D. Power
Thomas King, president of the data and analytics division at J.D. Power, sees positive signs in the sales performance for October. With retail sales growing nearly 6% year-over-year and a projected total seasonally adjusted annual rate (SAAR) of 16.1 million, the industry is on a recovery path. Transaction prices and interest rates are showing a downward trend, which could positively influence customer purchasing behavior.
Retail Transaction Prices and Consumer Spending
The average new-vehicle retail transaction price is estimated to drop to $44,904, which is $739 lower than the previous year. This decrease in price points signals an increase in consumer purchasing power. For the month, consumers are expected to spend around $48.3 billion on new vehicles, an increase of 11.8% from previous findings.
Inventory and Discounts
The retail inventory for October is projected to reach 1.9 million units, marking a 4% rise from September and a 25.1% increase compared to October 2023. An uptick in inventory levels is the driving force behind deepening discounts from manufacturers and retailers. However, the disparity in inventory availability across various models continues to persist, highlighting challenges in the market.
Profit Predictions and Retailer Insights
Retailer profit per unit is expected to see a downturn, projected at $2,245, which marks a 27.3% decline from last year. Due to the rising inventory levels, fewer vehicles are being sold above the manufacturer's suggested retail price (MSRP), which was seen at only 12.7% for new vehicles—down from 27.1% the previous year.
This adjustment in the market leads to an aggregate retailer profit forecast of $2.4 billion for new-vehicle sales, down 17.4% from the previous October. The increased inventory is influencing the dynamics significantly, including the time a vehicle remains unsold on dealer lots, which is projected to be 50 days, an increase from 20 days last year.
Market Trends in Financing and Incentives
Average monthly finance payments are set to reach around $738, a $14 increase from October 2023. Interest rates on new-vehicle loans are expected to average at 6.7%, which shows a slight decline of 68 basis points from last year. Despite decreasing transaction prices and interest rates, the financial burden from reduced trade-in equity continues to affect buyers.
Used Vehicle Market Update
In the used vehicle market, average retail prices have dipped to $28,472, a $669 reduction, equating to a 2.3% decline from the previous year. This drop in values is also impacting trade-in equity, now trending at $7,909, reflecting a loss of $911 year-over-year.
Looking Ahead to Holiday Sales
As we approach November, the automotive industry gears up for the holiday sales season, which traditionally includes promotional pricing and lease incentives, especially for premium vehicles. However, with the number of leases expiring being significantly lower than last year, automakers may need to employ creative strategies to attract new customers.
Global Automotive Market Overview
Globally, the automotive market is witnessing various trends. The light-vehicle selling rate for September was reported at 89 million units, continuing a slight decline but maintaining consistency over the previous months. Year-to-date performance shows a negligible increase of 0.3% compared to 2023, highlighting challenges that lie ahead.
Interestingly, while some markets, including North America, reported declines, others like Argentina, Brazil, and Russia are witnessing growth. The ongoing market transitions and economic fluctuations will undoubtedly affect future automotive sales trends worldwide.
Frequently Asked Questions
What is the total new vehicle sales forecast for October 2024?
The forecast for total new vehicle sales in October 2024 is expected to reach 1,327,600 units.
How much are retail vehicle sales projected to increase?
Retail vehicle sales are projected to grow by 5.9% from October 2023.
What is the average transaction price for new vehicles?
The average transaction price is expected to be $44,904, a decrease from the previous year.
How much are consumers expected to spend on new vehicles this month?
Consumers are anticipated to spend around $48.3 billion on new vehicles in October 2024.
What is the expected profit per unit for retailers?
The expected profit per unit for retailers is forecasted at $2,245 for October 2024.
