Westlake Village, California – The decline in the U.S. new vehicle market is slowing down, according to J.D. Power and Associates, citing projected July 2009 sales that are lower than in July 2008 but are the first improvement in year-over-year declines so far in 2009.
Sales in July dropped 19 per cent from July 2008, and sales from the first half of 2009 are down 32 per cent from the first half of 2008.
Based on the first 15 selling days of the month, J.D. Power said that new vehicle retail sales for July in the U.S. are expected to come in at 780,500 units, which represents a seasonably adjusted annualized rate (SAAR) of 8.2 million units. While July’s selling rate is down by four per cent compared with June, this pace remains consistent with the first half of 2009. Fleet sales have improved slightly after several months of weakness and production cuts, giving a July SAAR for total vehicle sales (fleet and retail) of 10 million units.
“Retail sales for 2009 are expected to be only incrementally affected by the Cash for Clunkers program, as many consumers don’t understand the specifics of the program, and if they do, they often find they don’t qualify for the incentive,” said Gary Dilts, senior vice-president of global automotive operations. “However, there is potential for increased sales in the short term as a result of select OEMs boosting incentives to match the program.”
The company said that to date in July, the Cash for Clunkers program – which gives consumers a rebate on new vehicles when they trade in old vehicles for recycling – appears to be affecting segment mix. The retail market share for compact vehicles has increased to 39 per cent, up approximately 2.5 percentage points from June. The shares for midsize and large vehicles have decreased, with the exception of large pickups, which are up by 0.5 percentage point. The company said that the increase in large pickup share can be attributed to the improved fuel economy of today’s trucks, compared with those being traded in.
J.D. Power said it is maintaining its forecasts for 2009 at 8.3 million retail sales, and 10.0 million for total sales.