September U.S. auto sales are forecast to drop nearly 1% from a year ago, despite a record high for consumer discounts, J.D. Power and LMC Automotive said on Monday.
The two auto industry consultants said September U.S. new vehicle sales will be 1.43 million, down 0.8% from a year earlier. The seasonally adjusted annualized rate for September will be 17.7 million vehicles, down from 18 million on the same basis a year earlier.
Retail sales to consumers, which do not include multiple fleet sales to rental agencies, businesses and government, were seen declining 1.4% in September. It would be the fifth month in the past seven to show a retail sales decline, J.D. Power and LMC said.
Wall Street analysts have pressured shares of major U.S. automakers because they have expected the industry downturn that looks to be under way, albeit at near-record sales levels. A year ago, sales hit a record high of nearly 17.5 million vehicles, according to Autodata.
LMC and J.D. Power on Monday maintained their 2016 sales forecast of 17.4 million vehicles.
As the market shrinks, automakers are hiking incentives to entice consumers to spend. September industry incentive spending is tracking at an average $3,923 per new vehicle sold, which would surpass the previous high from December 2008 of $3,753.
December 2008 was a time when the U.S. and global economies appeared to be in peril, and was the last month prior to the weakest year in U.S. auto sales since World War Two, adjusted for population growth.
New home sales, which usually correlate closely to pickup truck sales, fell 7.6% in August, the U.S. Commerce Department said on Monday.
Pickup truck and SUV sales accounted for 58.4% of U.S. auto sales in 2016 through August, compared with 54.4% in August 2015.
“The U.S. automotive market continues to show signs of little growth, yet in our opinion the numbers do not reflect a significant weakness or risk,” said Jeff Schuster, lead forecaster at LMC.
“The expectation remains for steady volume levels at the top line, despite a pullback in the retail market and increased monthly performance volatility. However, group and brand performance is beginning to diverge as competitive pressure is at an all-time high.”