Aug 29 (Reuters) – Sales of new vehicles in the U.S. are anticipated to increase by over 4% in August compared to the previous year, partly due to the Labor Day weekend occurring within this reporting period, as noted in a recent report by industry experts J.D. Power and GlobalData.

When adjusted for seasonal trends and the timing of Labor Day, sales are projected to remain relatively stable at an annualized rate of 15.3 million units.

Importance of the data

Increases in discounts from dealers and manufacturers, alongside a decrease in average transaction prices, are contributing to modest growth in the seasonally adjusted annual rate for August.

However, the industry is facing challenges due to a drop in leasing activity from three years ago. This means fewer lessees are coming back to dealerships to buy or lease new vehicles.

On Wednesday, J.D. Power predicted that the growth of electric vehicle (EV) sales in the first half of 2024 will be slower than anticipated due to heightened competition from gasoline vehicles.

Sales figures

For August, overall new vehicle sales, which include both retail and non-retail transactions, are expected to rise around 4.2% to approximately 1,437,954 units compared to last year.

Average transaction prices are moving toward $44,039, which is a drop of $1,895 from the previous year.

Profits for retailers per vehicle, covering gross profits as well as finance and insurance revenues, are projected to be $2,249, reflecting a 33% decrease since August 2023.

Noteworthy comments

“The growth in the shift to electric vehicles will be gradual, influenced by several interconnected factors,” stated Elizabeth Krear, vice president of the electric vehicle division at J.D. Power.

“The recovery in global demand appears to be slowing, with diminished volume affecting forecasts for the upcoming months,” noted Jeff Schuster, vice president of automotive research at GlobalData.