Kelley Blue Book: New-Car Sales to Fall 2-Percent

New-vehicle sales are expected to decline 2 percent year-over-year to a total of 1.34 million units in October, resulting in an estimated 17.9 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book.

“Although the headline shows a small decline in sales, October looks relatively strong for the industry, as evidenced by the nearly 18 million SAAR,” said Tim Fleming, analyst for Kelley Blue Book. “Sales blew past expectations in September toward an 18.5 million SAAR pace, and we expect October to keep up some of that momentum.

“Some of the strength can be attributed to replacement demand that continues in Texas and Florida, but perhaps more importantly, higher incentive spend is playing a role,” Fleming added. “Even with production cuts this year, incentives are on the rise and have reached 11 percent of average transaction prices. This is an indicator that new-vehicle demand is still contracting, and production cuts could be on the horizon to prevent oversupplies.”

Key highlights for the Kelly Blue Book October 2017 sales forecast include:

  • New light-vehicle sales, including fleet, are expected to hit 1.34 million, down 1.9 percent compared to October 2016, and down 11.8 percent from September
  • The seasonally adjusted annual rate (SAAR) for October is estimated to be 17.9 million, up from 17.8 million in October 2016 and down from 18.5 million in September
  • Retail sales are expected to account for 82.7 percent of volume in October, down from 83 percent in October 2016.

After a record year of sales in 2016 and seven consecutive annual increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.9 and 17.2 million units, which represents a 1 to 3 percent decrease from last year.

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