KPI – August 2026: State of Business – Automotive Industry

• KPI – August 2026: The Brief
• KPI – August 2026: State of Manufacturing
• KPI – August 2026: State of the Economy
• KPI – August 2026: Consumer Trends
• KPI – August 2026: Recent Vehicle Recalls

Global Light Vehicle Sales

In July, global Light Vehicle (LV) sales “improved marginally” to approximately 90 million units per year—a figure that remains well below last year’s market result. Likewise, year-to-date sales stand at 50 million units, down nearly 4% compared to the first seven months of 2025.

While data shows global light-vehicle sales remained relatively soft at a headline level, the selling rate improved somewhat in key markets like China. India posted a record month. Demand in the U.S. remained “in slight negative territory” year-over-year, while sales in Western Europe were relatively stable in July.

“The re-escalation in the Middle East conflict renews concerns about the H2 outlook, though oil prices remain well below the April peak,” according to the GlobalData report.

As such, the forecast for total global sales in 2026 was revised down to 89.7 million units, compared to an outlook of 90.5 million units a month ago.

“This forecast would represent a 2.8% year-over-year decline, as relative weakness in China, along with headwinds from economic and trade factors, drag down the global industry. Middle East tensions appear to be re-escalating, which could risk higher oil prices and other associated side effects including fuel costs, inflation, and consumer demand,” says Kimberly Krafft, analyst of Americas vehicle sales forecasts at GlobalData.

“Therefore, we are maintaining a cautious stance on our global light-vehicle outlook for the second half of the year,” she adds.

U.S. New Vehicle Market

Total new-vehicle sales for July 2026, including retail and non-retail transactions, are projected to reach 1,415,800—a 1.4% year-over-year increase, according to a joint forecast from J.D. Power and GlobalData.

While demand for new vehicles delivered the highest annualized sales pace so far this year, evaluating year-over-year results requires broader consideration. Data shows last year’s sales were boosted by an announcement that federal credits of up to $7,500 on electric vehicles would expire on September 30. In response, many consumers who were thinking about buying an EV accelerated purchases that otherwise would have occurred later in the year. On the other hand, last year’s sales were negatively impacted by lower-than-normal incentive escalation by manufacturers. Instead of discounts rising as they normally would at this time of year, incentive spending edged down, reflecting the cost pressure that manufacturers were anticipating from tariffs.

“As with last year, macroeconomic uncertainty and affordability challenges persist, while higher fuel prices are an additional headwind this year. Despite all these complex dynamics, new vehicle demand remains robust. In fact, retail consumers are expected to spend $51.8 billion buying new vehicles this month, up $1.2 billion from a year ago and the highest ever for the month of July,” explains Thomas King, president of the data and analytics division at J.D. Power.

Key Takeaways, Courtesy of J.D. Power:

• The SAAR is forecast to hit 16.9 million, up 1.7% year-over-year.
• The hybrid market share rose 2.5 percentage points to 15.9%, while the EV share fell 3.3 percentage points to 7% year-over-year. Non-EV incentives are tracking up 22.2%, while EV incentives fell 7% to $10,092 per vehicle.
• The average interest rate on new-vehicle loans is expected to fall seven basis points to 6.54%, the lowest July reading since 2022.
• The average transaction price of a new vehicle has increased to $45,369, an increase of 1.2% from a year ago. As a result, average monthly finance payments have climbed 3.3% to $808—the highest ever for the month of July.
• Average incentive spending per vehicle is trending toward $3,451, an 8.1% increase from a year ago. Incentives as a percentage of MSRP are expected to hit 6.7% in July, up 0.4 percentage points from July 2025.

U.S. Used Market

The Manheim Used Vehicle Value Index (MUVVI) fell to 207.4, reflecting a 1.2% decrease in wholesale used-vehicle prices (adjusted for mix, mileage and seasonality) during the first 15 days of August compared to July. The Manheim index is now flat compared to August 2025, declining from the elevated values we saw in the first half of the year.

“Wholesale values eased in the first half of August, with the Manheim Used Vehicle Value Index at 207.4, down 1.2% from July. That’s a bit more depreciation than the recent-year average for this month, but well within the normal historical range for August,” says Jonathan Gregory, senior director at Cox Automotive.

He notes it is not an unusual print, just a normal part of late-summer slowdown after a strong spring bounce. While the index is essentially flat year-over-year, it is largely a base effect. “Last August was itself one of the stronger post-pandemic prints, so the comparison was always going to be the toughest of the year,” Gregory explains. Non-adjusted values are telling a similarly mild story, down 0.8% on the month and off just 0.2% versus a year ago.

“Gas prices remain a factor worth watching,” he says. “The national average was $4.06 a gallon as of August 17, up from roughly $3.14 a year ago. Used EVs are still benefiting from that increase, with values up 5% year-over-year even as the pace of gains has cooled. That’s a normal glide path as off-lease EV supply, which we’ve been flagging all year, continues to build and gives buyers more choice. Non-EV values are roughly flat against last August, in line with typical seasonal patterns.”

A theme of affordability continues by segment. Compact Cars remain the strongest performer at plus 2.2% year-over-year, while the Luxury segment narrowed to a more modest 0.7% gain after leading for much of the first half. Midsize cars, SUVs and pickups are softer, which is consistent with the same rotation toward value.

“None of this points to anything beyond the market’s usual late-summer rhythm,” Gregory says.