October 21, 2002
Fewer incentives cause decline in October U.S. vehicle sales
Westlake Village, California – A drop in incentives is resulting in a dramatic decline in U.S. light-vehicle sales in October, according to J.D. Power and Associates.
With the average total of cash-plus-interest subvention, now at approximately (U.S.)$1,200 per vehicle compared to $1,480 in late August, consumers appear content to wait and see if automakers will get more aggressive with their use of incentives.
“As automakers start to sweeten the deal again with greater use of incentives, we believe many consumers are holding out to see how far the automakers will go,” said Walter McManus, executive director of global forecasting at J.D. Power and Associates.
New-vehicle sales through the second week of October were down 12 percent from the same period last month and down 30 percent compared with the same period last October, when sales of new vehicles set an all-time record.
While sales are expected to pick up slightly during the remainder of the month, October sales are projected to come in at a 15.5 million-unit SAAR-based on Power Information Network (PIN) retail sales data from the first two weeks of the month. Actual units sold in October are expected to reach 1.3 million.
“If incentive offerings increase or if we move closer to war against Iraq, sales could move dramatically up or down,” McManus said. “But it appears right now that most consumers are taking a wait-and-see approach.”
September ended with actual sales of 1,223,651 units and a SAAR of 16.3 million units. In October 2001 a record 1,725,772 units were sold for a 21.4 million-unit SAAR.
J.D. Power and Associates is keeping its 2002 calendar-year forecast at 16.8 million units.
The firm’s monthly sales forecasts are derived from a joint effort between its Global Forecasting Department and Power Information Network (PIN), a division of J.D. Power and Associates that compiles new-vehicle retail transaction data from more than 5,900 participating auto franchises in 26 U.S. markets.