TrueCar and ALG Forecast Both New and Used Vehicle Retail Sales Up Year-Over-Year for October 2020 Marking Strong Auto Retail Recovery

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(Neutral)

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(Positive)

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Rhea-AI Summary

In October 2020, TrueCar projects total new vehicle sales to reach approximately 1,307,998 units, reflecting a 6.1% decline year-over-year when adjusted for selling days. Retail sales are anticipated to rise by 0.3%, with U.S. revenue from new vehicle sales projected over $48 billion. The average transaction price is expected to increase by 3.1% year-over-year. Although fleet sales are forecasted to drop by 43%, the overall auto industry shows signs of recovery with rising demand for larger vehicles.

Positive

Retail sales of new vehicles expected to rise by 0.3% year-over-year.
Average transaction prices projected to increase by 3.1%, or $1,223.
Revenue from new vehicle sales expected to surpass $48 billion for October.

Negative

Total new vehicle sales projected down 6.1% year-over-year.
Fleet sales expected to decrease by 43% compared to last year.
Total seasonally adjusted annualized rate (SAAR) of total light vehicle sales projected to decline by 5%.

10/27/2020 - 09:00 AM

New vehicle retail sales sustain momentum as retail sales increase year-over-year for the second month in a row, up 0.3% adjusted for selling days
Used vehicle sales forecast to be up year-over-year for fifth consecutive month
Average Transaction Prices are expected to increase 3.1% year-over-year

SANTA MONICA, Calif., Oct. 27, 2020 (GLOBE NEWSWIRE) -- TrueCar, Inc., and its ALG, Inc. subsidiary, project total new vehicle sales will reach 1,307,998 units in October 2020, down 6.1% from a year ago when adjusted for the same number of selling days. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 15.7 million units. Excluding fleet sales, TrueCar and ALG expect U.S. retail deliveries of new cars and light trucks to be 1,188,043 units, an increase of 0.3% from a year ago when adjusted for the same number of selling days.

Average transaction prices (ATP) are projected to be up 3.1% or $1,223 from a year ago and up 0.7% or $262 from September 2020. TrueCar projects that U.S. revenue from new vehicle sales will reach more than $48 billion for October 2020, up 0.4% (based on a non-adjusted daily selling rate) from a year ago and down 2.5% from last month.

“The auto industry recovery is absolutely striking. We clawed back more new car sales each month since sales bottomed out in April and are now seeing year-over-year new car retail sales growth for two consecutive months. This is a phenomenal outcome for the industry, as inventory is starting to rebound and demand remains high. There are positive signals that the recovery will sustain,” said Eric Lyman, Chief Industry Analyst for ALG.

“A handful of brands, such as Mercedes and Subaru, are seeing an increase in sales month-over-month which is notable given that sales typically trend stronger in September than in October,” added Lyman. “These brands were hit harder by inventory shortages previously and are starting to replenish supply and address pent up demand.”

Additional Insights: (Forecast by ALG and TrueCar)

Total retail sales for October 2020 are expected to be up 0.3% from a year ago and down 14.3% from September 2020 when adjusted for the same number of selling days.
Fleet sales for October 2020 are expected to be down 43% from a year ago and down 6% from September 2020 when adjusted for the same number of selling days.
Total SAAR is expected to decrease 5% from a year ago from 16.5 million units to 15.7 million units.
Used vehicle sales for October 2020 are expected to reach 3.3 million, up 1% from a year ago and down 4% from September 2020.
The average interest rates on new vehicles are 5.7% and the average interest rates on used vehicles are 8.1%.

“Domestic automakers such as FCA and GM have made significant jumps in retail sales year-over-year, as shoppers continue purchasing large utility vehicles and trucks,” said Nick Woolard, Director of OEM Analytics at TrueCar. “There was a 5.4% increase in demand for utility vehicles and an increase of 8.4% in demand for pickup trucks year-over-year on the TrueCar platform.”

“New vehicle average transaction prices continue to rise year-over-year due to this consumer preference toward larger vehicles. Used vehicle prices have also increased significantly in the past few months, as a result of the new car inventory shortages and strong consumer demand,” added Woolard. “On the TrueCar platform, used vehicle listing prices increased by 7.6% year over year, making this a great time for consumers who are looking to trade-in or sell their vehicles and use the funds to upgrade to a new vehicle.”

ALG will be hosting the 20/20 Hindsight webinar on November 17, 2020 at 11 am PT. Join us as we will look back on 2020 with a review of how the outlook for the automotive industry has evolved since the early stages of COVID-19. Experts will discuss key learnings, the decisions that improved performance or made things worse, while leaning into the data points that are leading to a more optimistic recovery and ensuring that 2021 is a rebound year for all stakeholders in the industry. For early registration of this complimentary webinar, click here.

October 2020 forecasts for the 13 largest manufacturers by volume. For additional data visit the ALG Newsroom and TrueCar Newsroom.

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Oct 2020 Forecast

Oct 2019 Actual

Sep 2020 Actual

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