Razor-Thin Increase Vs. A Year Ago; High Prices Continue

U.S. auto sales are on track to be higher in August vs. the same month a year ago, but just barely — an increase of less than 1% due to the ongoing shortage of new cars and trucks, according to a forecast from J.D. Power and LMC Automotive.

For consumers, the upshot is continued, record-high transaction prices and record-low incentives.

The August auto sales forecast predicts August sales of about 1.1 million new cars and trucks, up 0.6% vs. August 2021, based on online shopping through roughly the first two-thirds of the month.

Low inventory is still the sticking point. August would make it 10 months in a row new car and truck inventory falls below 900,000, the forecast said. An ongoing computer chip shortage is the biggest complaint.

Low supply and high demand are driving the average retail transaction price to an estimated $46,259, a record for any month, according to J.D. Power and LMC Automotive. Transaction price is a measure of what people actually pay, including options, and taking incentives into account.

By the same token, the average incentive per new vehicle fell to $969, down 47% vs. a year ago, the forecast said. That would make it fourth months in a row below $1,000, according to Thomas King, president of the data and analytics division at J.D. Power.

Expressed as a percentage of Manufacturer’s Suggested Retail Price, the average incentive per vehicle was an estimated 2% in August, down from 4.3% a year ago, according to J.D. Power and LMC Automotive.

The low-supply, high-demand, high-price environment is likely to continue for at least another year, said Jack Hollis, executive vice president of sales at Toyota Motor North America.

“We’re going to be dealing with this for one more year,” Hollis said, in a recent webinar hosted by the Detroit-based Automotive Press Association. “I don’t believe we’ll see growing dealer stock for one more year.”