Rising Stock Levels Offer Buyers More Options Amid Market Changes
Sales Drop 1.8% from 2023 on Adjusted Basis
New Car Inventory Growth. According to a joint forecast from https://www.jdpower.com/ and GlobalData, total new-vehicle sales for September 2024, including retail and non-retail transactions, are projected to reach 1,164,900. This marks a 1.8% decrease compared to September 2023 on a selling-day-adjusted basis. With 23 selling days in September 2024—three fewer than in 2023—the unadjusted sales volume shows a more significant drop of 13.2%.
Flat SAAR Reflects Stable Market
The seasonally adjusted annualized rate (SAAR) for new-vehicle sales is expected to remain steady at 15.8 million units, consistent with September 2023.
Q3 New-Vehicle Retail Sales Increase Despite Fewer Selling Days
Retail Sales Show Growth
Retail sales for new vehicles in Q3 2024 are forecasted to reach 3,263,500 units, a 1.4% increase over Q3 2023 despite having two fewer selling days.
Rising Inventories and Discounts
“Retail inventory is projected to reach 1.8 million units, up 6.2% from August and a substantial 30.7% increase from September 2023,” said Thomas King, president of J.D. Power’s data and analytics division. King noted that the increased inventory results in larger discounts from manufacturers and retailers. However, supply inconsistencies persist across brands and models, with some popular vehicles still in short supply.
Falling Prices and Declining Profits
New-Vehicle Prices Decline
Due to higher manufacturer incentives, larger discounts, and more availability of lower-priced vehicles, the average retail transaction price for new vehicles is expected to drop. Prices are trending towards $44,467—down 2.8% from September 2023. This results in consumers spending $40.4 billion on new vehicles this month, 16.8% less than in September 2023.
Retailer Profits Take a Hit
Retailer profit per unit, including vehicle gross profit and finance/insurance income, is forecasted to be $2,294—down 29% from September 2023. Rising inventory levels drive this decline, with fewer vehicles selling above MSRP. Currently, only 13.6% of new vehicles are being sold above MSRP, a drop from 26.1% a year ago.
Inventory Surge Changes Buyer Behavior
Shoppers Shift to Dealer Lots
The rise in inventory means fewer vehicles are being pre-sold, and more consumers are purchasing directly from dealer lots. J.D. Power predicts that 32.4% of vehicles will sell within 10 days of arriving at dealerships, a significant decrease from 58% in March 2022. The average time a vehicle remains in dealer possession before sale is expected to extend to 48 days, compared to just 29 days a year ago.