According to data from J.D. Power, the retail automotive industry is looking at a 14.3 million SAAR for July, which is about 2.5 million units lower than July of 2019. Retail sales are expected to be off 10% from 2019 overall, however, this means there will only be a gap of 4% down from pre-Coronavirus forecasts. So, the retail side has normalized faster than anyone expected it could. To discuss more industry insights for the month of July, we’re pleased to welcome back Tyson Jominy, Vice President of data and analytics at J.D. Power.
Despite COVID-19 hurdles, both the OEMs and publicly-traded automotive groups had, on average, stellar second-quarter results. Losses appear to be lower than consensus for automakers, and dealer grosses are high. There is a lot of positive news for the industry.
In terms of new and used-vehicle sales, Tyson says, “What’s selling, in fact, it’s pretty dramatic, truck and SUVs are now 76% of the market. So just a dramatic shift over to that side. It’s an old story, right? But if you look at the news recently, we’re seeing sedans cut all over the place. This situation will have very long repercussions.”
Sedans are being left behind. J.D. Power data suggests that 40% of subcompact sales in 2019 have already been discontinued in 2020. As a matter of fact, the Chevy Bolt is the only remaining domestic subcompact. This is surprising given that the average transaction price is up about 6% from July 2019, and there is still a lot of concern around vehicle affordability. Another big issue in the marketplace right now is new vehicle inventory.
“Almost nobody has inventory. In fact, cars are turning so fast, 41% of all sales in July turned in under 20 days,” says Tyson. “Essentially, the vehicle is coming off the transport truck and a customer is there to greet it with open arms.”
For more great insight and data findings from Tyson Jominy, be sure to watch our entire interview above.
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