WASHINGTON — With Labor Day weekend just around the corner, it will be auto dealers’ last big chance of the year to roll out their traditional three-day weekend sales, and the U.S. auto industry is piling on the incentives to move inventory.
J.D. Power says incentives – cash on the hood, in dealerspeak – have averaged $3,559 this month, the highest ever for August. The highest incentive spending for any month was $3,753, set in December 2008.
A monthly report from J.D. Power and LMC Automotive says the average price for a new vehicle sold so far this month is $30,942, also a record for the month of August.
But U.S. auto dealers have seen a slowdown in sales from what has been a breakneck pace.
J.D. Power predicts August retail sales will be 6.5 percent lower than a year ago. Retail sales year-to-date through August are expected to be down 1.2 percent, compared to the same period last year.
“Following 66 consecutive months of retail sales growth that began in September 2010, we’ve seen four declines in the past six months, and this much of a pullback in August will be a disappointment for the industry,” said John Humphrey, senior vice president of J.D. Power’s global automotive practice.
“Softening retail sales amid low interest rates, relatively cheap gas and automakers pushing more aggressive incentives may be an indicator that further growth in this cycle will be difficult,” he said.
LMC Automotive’s forecast for full-year total light-vehicle sales remains at 17.4 million, which would miss last year’s record by just 0.3 percent. That figure includes fleet sales. The forecast for retail auto sales remains at 14.0 million, which would be down 1.6 percent from last year.
Even so, U.S. consumers are on pace to spend $39.3 billion on new vehicles in August, the seventh-highest for any month on record.
Last year was the first record year for sales since 2000.
