July’s Incentives Fuel Auto Market Rebound

ESA Car Keys | Automotive Market Intel
After hitting a few bumps in May and June, the US auto market bounced back strong in July.

The second half of 2016 started with a bang, as July’s seasonally-adjusted annualized rate (SAAR) of US auto sales finished at 17.77M units, the strongest July in over a decade. Total volume for July was up 0.3% year-over-year, and YTD volume for the first seven months of 2016 is running 1.1% ahead of 2015. Prior to July’s strong result, the market’s DSR* (daily sales rate) — a better indicator of the retail automotive pace — had been down year-over-year in three of the past four months.

July’s tally coincided with a wave of increased incentives (incentives were up 5.2% YOY), as average transaction prices dropped. Light trucks accounted for a staggering 61.1% of volume (+7.6% vs 2015), while passenger car sales were down -9%.

Big gainers for the month included Kia, Hyundai, and Honda, while VW, GM, and Ford all gave up ground versus their July 2015 share.

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July 2016 US Auto Volume | Source: WardsAuto InfoBank

One final note regarding the first seven months of activity: While total volume was up 1% (from 10.0M units to 10.1M), this masked larger swings within individual automakers. GM, Toyota, VW and BMW together have sold 158,355 fewer vehicles YTD in 2016 vs 2015. Fiat-Chrysler, Honda, and Nissan more than accounted for this loss, showing a 7-month gain of 163,756 units year-over-year.

Your ESA Car Keys recap follows.


JULY 2016 HIGHLIGHTS

Wards Auto and NADA MarketBeat

  • July SAAR: 17.77 units
  • July Units: 1.514M vehicles sold
  • Change: DSR* +0.3% | Volume +0.3% vs July 2015
  • Gainers (by Volume): Daimler +7.1%, Kia +6.5%, Hyundai +5.6%, Honda +4.4%, Audi +4.0%, Subaru +3.1%
  • Laggards (by Volume): VW -8.1%, BMW -5.0%, Ford -3.1%, GM -1.9%, Toyota -1.4%

Be sure to visit NADA’s MarketBeat, or Wards Auto for a concise recap of the US automotive market.

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*DSR: Daily Sales Rate. A more reliable indicator of the pace of auto sales which accounts for actual car-selling days per month.
*SAAR: Seasonally-Adjusted Annual Sales Rate.
SOURCES: Wards Automotive InfoBank, NADA MarketBeat, Automotive News.


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Dave Eckstein, ESA & Company | Real. Local. Results: 2012Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.


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