U.S. auto sales are forecast to drop more than 7 percent in October from the same period in 2015, the sixth monthly decline so far this year, as automakers offer steep discounts and adjust production to manage inventories, J.D. Power and LMC Automotive said on Friday.
The two auto industry consultants said October U.S. new vehicle sales will number 1.347 million, down 7.3 percent from 1.453 million units a year earlier. The seasonally adjusted annualized rate for October will be 17.7 million vehicles, down from 18.1 million on the same basis a year earlier. This October has two fewer auto sales days than October of 2015.
The U.S. auto industry has experienced several years of robust sales and has not experienced six months of declines since before the Great Recession.
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"Although automotive sales are expected to remain near the all-time high, they are still expected to contract slightly this year, as well as in 2017," Jeff Schuster, LMC Automotive's senior vice president of forecasting said in a statement.
He said that over the rest of this year and 2017, nearly a third of all vehicles in the market will either be new models or redesigned versions, which "will test the discipline of the industry for the first time since 2009."
"So far, automakers are adjusting production levels to manage inventory," Schuster said.
As the market shrinks, automakers are hiking incentives to entice consumers to spend. October industry incentive spending fell short of September's record high of $3,921 per vehicle, but at $3,726 per unit, was still 12 percent higher than in October 2015.