New-vehicle sales are on track to jump 8% this month as consumers take advantage of incentives, though deliveries still aren’t at prepandemic levels.
Retail sales are forecast to rise 8% year-over-year to a little more than a million units, when accounting for one fewer selling day than last year, according to a J.D. Power forecast. Without the adjustment, it sees about a 4% bump.
It will be the fifth straight month of sales increases, J.D. Power observed.
Automakers have continued to raise incentives as they jockey for consumers due to affordability concerns and accumulating inventory at dealerships. The average per-vehicle spend is predicted to be up 23% this month from a year ago to $3,227, or about 7% of the manufacturer’s suggested retail price.
To do so, they’re pulling back on incentives to fleet customers, and fleet sales are consequently forecast to fall about 13% this month.
“Nevertheless, the fleet market remains a significant opportunity to increase sales this year for manufacturers willing to offer more compelling discounts,” said President of J.D. Power’s Data and Analytics Division Thomas King in a press release on the forecast.
Despite the incentives, affordability for consumers still challenges the industry and keeps the sale rate below the pre-2020 pace, J.D. Power said. The expected average transaction price for the month is $44,619, about flat year-over-year.
It expects dealer profit per unit to be down about 12% year-over-year this month to $2,171 for a 10% industrywide decline to a total of $2.1 billion in profit. That includes finance-and-insurance revenue.
