New Vehicle Sales Expected to Drop for Q3

Analysts at Cox Automotive predict new vehicle sales in the U.S. will drop 2.1% on a year-over-year basis. They point to expected declines by General Motors, Toyota and Stellantis as the primary reason for the slide. However, it’s not all bad news.

While some automakers faced a tough time during the period, American Honda enjoyed a monster quarter with sales up 10%. As a result, Cox analysts believe the market will sell 15.7 million vehicles in 2024 — in line with their earlier forecasts.

“Honda is expected to see even more growth this quarter, thanks to another strong quarter of CRV and Accord sales,” said Charlie Chesbrough, senior economist at Cox Automotive. “So far this year, Honda has gained nearly 1% market share and has moved up into the Top 5 in U.S. sales among the major automakers, knocking Stellantis down to No. 6.”

Other factors

Although Honda’s robust performance during the period did move the needle, there were other contributors that need to be factored in. Fleet sales and new vehicle leasing drove a bigger portion of sales than usual.

Fleet sales year to date in 2024 are tracking higher by about 7% year over year, while leasing is higher by 24%, thanks in large part to strong electric vehicle (EV) and plug-in hybrid lease offers. In real numbers, leasing accounted for 3.1 million vehicles compared with 2.7 million during the year-ago period. Meanwhile, fleet sales were up 200,000 units in Q3, from 2.8 million to 3 million.

Retail purchases year-to-date in 2024 — vehicles bought with cash or via an auto loan and representing nearly 60% of all sales — are forecast to be lower by 4% compared to 2023.

September swoon

September’s sales numbers — along with the third quarter results — will be released next week. And when they do, they may seem a bit contradictory. Sales will drop 11% compared to September 2023 and 16% compared to last month.

However, the daily sales rate will be higher. September has just 23 sales days compared with 26 last September and 28 in August. In short, more days means more sales, but on a daily average, this September will enjoy a carryover from the strong August numbers.

“The September sales pace is expected to improve from a rather slow August, maintaining the trend of large swings we’ve witnessed this year,” Chesbrough said.

“With the election season fully upon us, more volatility seems likely through the end of the year. However, the recent interest rate cut will help household finances, and automakers are being more aggressive with discounts, so we remain optimistic that new-vehicle sales could improve marginally through the final quarter of 2024.”

More Sales Stories

• Sales of New Vehicles Increase in July Amid High Interest Rates and Computer Problems
• Hackers Hijack June Sales, Automakers Report Mixed Sales Picture
• Japanese Automakers Post Strong April Sales Numbers, Korean Automakers See Sales Dip

Moving metal

The sales pace will remain high in September for basically the same reasons it was strong in August: plenty of new vehicles in inventory and higher incentives to help get those vehicle off dealer lots quickly.

New-vehicle sales incentives have been increasing through 2024, with August incentives estimated by Kelley Blue Book to be at the highest level since the first half of 2021. As a result, the average transaction price for a new vehicle continues to drop.

Kelley Blue Book noted the average transaction price (ATP) for a new vehicle in the U.S. was $48,401. New-vehicle prices in July were mostly unchanged from the revised-lower June ATP of $48,424, a drop of just $23 and last year ($106). According to Kelley Blue Book, new-vehicle ATPs were lower in July by 3.1% from the peak in December 2022 at $49,929.