Total new-vehicle sales in October are projected to increase by 10.3% over the same month in 2023, according to a recent joint forecast from J.D. Power and GlobalData. With 1.3 million units expected to be sold, the market shows a strong upward trajectory despite economic pressures.
In terms of year-over-year performance, retail sales are expected to see a 5.9% increase from October 2023 on an adjusted basis, totaling approximately 1.1million units. This rise aligns with an expanding inventory, which grew by 25.1% since last year, allowing consumers greater access to available vehicles.
"October results show a solid sales performance, with retail sales growing nearly 6% year over year and a projected total SAAR of 16.1 million," noted Thomas King, president of the data and analytics division at J.D. Power.
The average transaction price for new vehicles has decreased slightly to $44,904, down by $739 from October 2023, largely due to increased manufacturer incentives and retail discounts. This dip in prices, combined with attractive lease offers, has pushed leasing activity up, making up 23.2% of retail sales -- a rise from 20.8% last year.
However, while consumer spending on new vehicles this month is anticipated to reach $48.3 billion, an 11.8% increase from last year, retailer profits per unit have dropped. The average retailer profit per vehicle, including finance and insurance income, is estimated at $2,245, a significant 27.3% decline from October 2023.
As King explained, “Rising inventory is the primary factor behind the profit decline and fewer vehicles are selling above the manufacturer's suggested retail price."
Furthermore, incentive spending per vehicle has grown to $3,149 on average, marking a 70.5% increase from the previous year, and expected to reach 6.3% of the manufacturer’s suggested retail price. These incentives include reduced leasing costs and higher discounts, which have improved consumer accessibility but have placed additional pressures on retailer margins.
Looking at the global landscape, industry experts project a positive outlook for October, forecasting a 4% increase in global light-vehicle sales, with North America and other major markets expected to post gains. As global sales stabilize, the annual forecast for 2024 now stands at 88 million units, a 1.4% increase over 2023.
