Sorry, Shoppers: October Auto Sales Expected to Slip, Along With Incentives

Matt Posky
by Matt Posky

Analysts are projecting U.S. light vehicle sales will decline in October as incentives do the same. Could they possibly be related?

While we don’t have have official figures on how much of the domestic population has a limitless supply of cash, our collective intuition suggests most do not. This leads us to believe the elevated cost of owning an automobile has likely impacted deliveries for this month. Fortunately, the experts seem to agree, predicting the lowest October volume since 2014.

New vehicle incentives have been on the decline for a while now. This looks to be the fourth consecutive month without a rebound — which would make it the longest time frame since the recession, according to J.D. Power. That’s not necessarily a bad thing for automakers, since they’re losing less money on every model sold.

Consumers are less than enthralled by the trend, hence the faltering volume. But that’s alright with automakers, especially those able to move a lot of trucks — which offer manufacturers a wider profit margin. But dwindling demand is probably not entirely due to higher prices. It’s an accepted fact that U.S. market growth has more or less plateaued, helping OEMs make the decision to switch tactics.

“For manufacturers, the financial benefits of continued growth in truck mix along with reduced incentives is helping to offset the effect of reduced sales volumes,” said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. “Manufacturers have succeeded in better aligning production with consumer demand, which is the primary driver of reduced incentive levels. Given those reduced incentive levels, the overall outlook for the financial health of the industry is positive despite the lower sales volumes.”

Cox Automotive estimates a 6.6 percent decline in October sales vs last month and a 1.9 percent drop against last October, while J.D. Power is a bit more forgiving and Edmunds less so. Either way, volume is falling while interest rates and prices are on the rise. Average transaction prices appear on pace to land around $32,947 at the end of this month, surpassing the previous record set exactly one year ago by $489.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Bkojote Allright, actual person who knows trucks here, the article gets it a bit wrong.First off, the Maverick is not at all comparable to a Tacoma just because they're both Hybrids. Or lemme be blunt, the butch-est non-hybrid Maverick Tremor is suitable for 2/10 difficulty trails, a Trailhunter is for about 5/10 or maybe 6/10, just about the upper end of any stock vehicle you're buying from the factory. Aside from a Sasquatch Bronco or Rubicon Jeep Wrangler you're looking at something you're towing back if you want more capability (or perhaps something you /wish/ you were towing back.)Now, where the real world difference should play out is on the trail, where a lot of low speed crawling usually saps efficiency, especially when loaded to the gills. Real world MPG from a 4Runner is about 12-13mpg, So if this loaded-with-overlander-catalog Trailhunter is still pulling in the 20's - or even 18-19, that's a massive improvement.
  • Lou_BC "That’s expensive for a midsize pickup" All of the "offroad" midsize trucks fall in that 65k USD range. The ZR2 is probably the cheapest ( without Bison option).
  • Lou_BC There are a few in my town. They come out on sunny days. I'd rather spend $29k on a square body Chevy
  • Lou_BC I had a 2010 Ford F150 and 2010 Toyota Sienna. The F150 went through 3 sets of brakes and Sienna 2 sets. Similar mileage and 10 year span.4 sets tires on F150. Truck needed a set of rear shocks and front axle seals. The solenoid in the T-case was replaced under warranty. I replaced a "blend door motor" on heater. Sienna needed a water pump and heater blower both on warranty. One TSB then recall on spare tire cable. Has a limp mode due to an engine sensor failure. At 11 years old I had to replace clutch pack in rear diff F150. My ZR2 diesel at 55,000 km. Needs new tires. Duratrac's worn and chewed up. Needed front end alignment (1st time ever on any truck I've owned).Rear brakes worn out. Left pads were to metal. Chevy rear brakes don't like offroad. Weird "inside out" dents in a few spots rear fenders. Typically GM can't really build an offroad truck issue. They won't warranty. Has fender-well liners. Tore off one rear shock protector. Was cheaper to order from GM warehouse through parts supplier than through Chevy dealer. Lots of squeaks and rattles. Infotainment has crashed a few times. Seat heater modual was on recall. One of those post sale retrofit.Local dealer is horrific. If my son can't service or repair it, I'll drive 120 km to the next town. 1st and last Chevy. Love the drivetrain and suspension. Fit and finish mediocre. Dealer sucks.
  • MaintenanceCosts You expect everything on Amazon and eBay to be fake, but it's a shame to see fake stuff on Summit Racing. Glad they pulled it.
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