Early reports based on the first 13 days of the month indicate that the US auto industry did not have a good April. According to industry consultants JD Power and LMC Automotive, US auto sales in April of 2017 are projected to fall 2 percent compared to April of 2016. The same reports predicted that total new auto sales in 2017 would add up to about 17.5 million, compared to the previous projected figure of 17.6 million. At the same time, consumer discounts remain at a high level, at great cost to the long-term future of the industry.
In 2016, the US auto industry was experiencing a boom in sales, hitting a record high of 17.55 million new cars and trucks sold. The market soon became saturated, causing many car companies to offer higher incentives to get consumers to buy. These type of discounts can seriously affect resale prices further down the line.
For context, consumer discounts in April 2017 averaged $3,499 per unit sold. This is a record-breaking figure, surpassing discounts offered during the previous record year of 2009 at the height of the recession. The time a new car spends on the dealer’s lot is also reaching levels comparative to July of that year. Of course, average prices are also at a record high of $31,380.
These forecasts, coupled with low sales figures from March, have led many industry watchers to believe that US auto sales have peaked. This is a cause of concern for major automakers who still have a large unsold inventory to move.
Recent Comments