TrueCar (TRUE) Sees 1.43M New Vehicle Sales in October
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TrueCar, Inc. (NASDAQ: TRUE), the modern car-buying service, projects total new vehicle sales, including fleet deliveries, will hit 1,427,500 units in October, an 11.4 percent increase from a year ago and the most for the month since 2001.
The expected double-digit growth will push the seasonally adjusted annualized rate (SAAR) for total light vehicle sales to 17.9 million units compared to 16.6 million units a year ago. Continued consumer confidence coupled with attractive model year-end sales campaigns may boost retail sales 11.6 percent to 1,206,800 units.
“The industry remains hot with October marking the third month this year of double-digit growth,” said Eric Lyman, TrueCar’s vice president of industry insights. “Interest rates are still low, which helps move vehicles off lots for consumers ready to buy. Automakers’ promotions also sweetened the deal as the model-year close-outs carried over from September.”
Subaru may be the month’s sales leader with a 17.9 percent rise in volume, resulting in a best-ever October for the brand. Kia Motors America follows with a 15.2 percent increase in sales and should also post record October volume. FCA may rank third with a 14.9 percent sales gain due to strong Jeep brand sales likely to post a 31.3 percent gain. This would result in the 67th consecutive month of year-over-year sales gains for FCA. On a daily selling rate (DSR) basis, adjusting for one more day this month versus October 2014, sales should rise 7.4 percent.
Luxury cars and truck sales are expected to grow 9.9 percent compared to a year ago. Non-luxury volume will likely expand by 11.6 percent versus last year. Pickup truck, crossover and utility vehicles remain popular and continue to propel overall industry growth.
“We expect automakers to close the year with sales of 17.4 million new vehicles,” said Lyman. “Total auto market revenue should reach a record $1.2 trillion, highlighting the strength of both the new and used markets and the rich mix of vehicles being sold.”
TrueCar projects total revenue from U.S. sales of new and used vehicles will rise 7 percent this year to an all-time industry record of $1.2 trillion. U.S. consumers will likely buy a total of 55.8 million new and used cars and light trucks in 2015, up 4.2 percent over 53.5 million in 2014.
Incentive spending by automakers averaged $3,104 per vehicle in October, up 14.1 percent from a year ago and down 1.2 percent from September 2015.
“A drag in model year-end sales and promotions can be attributed to increasing levels of incentives,” said Stacey Doyle, TrueCar’s senior industry analyst. “Last month only 27 percent of sales comprised new model-year vehicles versus 32 percent September 2014, which means this year heavier incentives dollars historically spent in September overflowed into October.”
Interest rates remain unchanged and overall U.S. economic conditions are still strong. The Conference Board’s Consumer Confidence Index® improved by 1.7 points in September, hitting 103. Meanwhile, the unemployment report in September was 5.1 percent, the lowest for the month in eight years. Gas prices also remain favorable, falling to a national average of $2.20 per gallon on October 26 from $3.05 a year earlier.
Other key findings for October:
Forecasts for the 12 largest manufacturers by volume:
Total Unit Sales
% Change vs. October2014
% Change vs.October 2014(Daily Selling Rate)
Total Market Share
October 2015 Forecast
Retail Unit Sales
October 2015 Forecast
% Change vs. October 2014
% Change vs. October 2014(Daily Selling Rate)
Incentive per Unit October2015 Forecast
Incentive per Unit % Change vs.October 2014
Incentive per Unit % Change vs.September 2015
Total Spending October 2015 Forecast
(Note: This forecast is based solely on TrueCar’s analysis of industry sales trends and conditions and is not a projection of the company’s operations.)
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