June Could Mark End of Sales Growth for SUVs, Edmunds Forecasts | Edmunds

June Could Mark End of Sales Growth for SUVs, Edmunds Forecasts

Edmunds forecasts that June could mark the end of five consecutive years of market share growth for SUVs.

The expert analysts at Edmunds note that new-vehicle sales incentives are up 23 percent overall, but incentives on SUVs are up by as much as 47 percent. However, despite the attractive deals being offered to consumers, SUVs are staying in dealer showrooms for longer periods of time. So far in 2017, the average SUV sat for 61 days before it was sold, compared to 56 days in 2016.

"For the last few years, SUVs almost seemed to sell themselves. But as the market starts to level off, automakers are having to work a little harder and make the deals a little bit sweeter to hit their sales targets," said Jessica Caldwell, Edmunds executive director of industry analysis. "The silver lining is that SUV demand isn't completely hitting the wall, but even this hot segment isn't immune to the dip the entire market is experiencing this year."

According to the latest Edmunds monthly sales forecast, automakers will sell a total of 1,479,042 new cars, trucks and SUVs in the U.S. in June. That would be a 2.3 percent decrease in sales from May and a 2.3 percent decrease from June 2016.

Despite the recent downturn in sales, Edmunds expects that favorable economic conditions will combine with new incentives to spark a rally in the second half of the year. The Edmunds analysts predict that a total of 17.2 million vehicles will be sold in 2017, a 2 percent drop from the record high in 2016 but still the fourth best year for auto sales in U.S. history.

While six straight months of sales declines sounds troubling, June is sandwiched between two major holiday sales events, "which makes it a bit of a gloomy month historically," Caldwell said. "Car shoppers are savvy enough to know automakers push the deals on holiday weekends, and are willing to hold off on buying until they know they're getting a hot bargain."

Edmunds analysts estimate that 3.2 million used vehicles will be sold in June 2017, compared to 3.3 million in May.

Among major manufacturers, only Audi/Volkswagen, Honda and Toyota will realize year-over-year sales growth in June, according to Edmunds. Audi/VW is expected to see the largest increase, with a significant 13 percent spike (47,746 vehicles sold this month, compared to 42,254 in June 2016). Next will be Honda, Edmunds forecasts, with an increase of 1.4 percent (140,654, up from 138,715 at this time last year), followed by Toyota, with a gain of 0.1 percent (198,426 sales, compared to 198,257 in June 2016).

According to the Edmunds analysis, Fiat Chrysler will be hit with the largest year-over-year sales reduction: 10 percent (182,093 units, down from 202,421 in June 2016). Ford will experience a drop of 5.5 percent (225,915 sales, compared to 239,096 at this time last year). Nissan and Hyundai/Kia are each expected to see a decline of 4.1 percent (134,850, down from 140,553, and 124,731, down from 130,083, respectively).

More insight into recent auto industry trends can be found in the Edmunds Industry Center.

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