U.S. sales of new vehicles are expected to experience a significant surge of over 13% in September, marking the second consecutive month of double-digit sales growth. This rise in sales comes amidst production challenges faced by the Big Three automakers due to an ongoing strike.
A joint forecast conducted by J.D. Power and GlobalData projects the sale of approximately 1,309,900 vehicles through both retail and wholesale channels for the month of September, indicating a remarkable 13.8% increase compared to September 2022. It is important to note that this forecast takes into account an additional selling day in September. Meanwhile, retail-only new-car sales are expected to see an 8% year-on-year growth.
In the coming week, Tesla Inc. TSLA, -1.48% and General Motors Co. GM, +0.28% are anticipated to release their third-quarter figures, although both companies have shifted towards reporting sales on a quarterly basis instead of monthly. Ford Motor Co. F, -0.32% and the U.S. divisions of various foreign-based carmakers are also set to report their September sales during this period.
It is worth noting that more than 18,000 autoworkers from Ford, GM, and Stellantis NV STLA, -0.16% remain on strike. The union has indicated that it may announce additional strike locations on Friday.
United Auto Workers Strike Impacts Automakers
The United Auto Workers strike, which began on Sept. 14, has taken a unique approach this time by expanding its reach to include GM and Stellantis distribution centers. This departure from the usual practice of striking at one company at a time has caught the attention of industry experts.
According to J.D. Power and GlobalData, the strike’s timing coincides with a rise in inventories for automakers. The September figures indicate that the seasonally adjusted annualized rate for new-vehicle sales could potentially reach 15.4 million vehicles, which is a significant increase of 2 million vehicles compared to September 2022.
Although some may be concerned about the strike’s impact on car sales, analysts suggest that any immediate effects are unlikely unless the strike persists longer than anticipated. To put things into perspective, a similar strike at GM lasted nearly six weeks back in 2019.
One notable consequence of the ongoing strike is the rise in average U.S. car prices, which have reached approximately $48,000. Additionally, buyer incentives are scarce at dealerships and usually apply to vehicles that are not in high demand. Another factor influencing the market is the presence of higher interest rates, posing yet another obstacle for potential car buyers.
If you’re in the market for a new car, it’s important to manage your expectations. Despite an increase in vehicles available for sale, don’t anticipate significant bargains or exceptional deals at dealerships. The prices are holding steady, and finding affordable options can be challenging.
In conclusion, while the United Auto Workers strike may impact automakers and potentially disrupt supply chains, its direct influence on car sales remains uncertain. The market conditions, including rising prices and limited incentives, present their own challenges for prospective buyers. With all these factors in mind, it’s essential to adapt and understand current circumstances when embarking on your car-buying journey.