August's US light-vehicle SAAR sales increase to 17.7 mil. units, unit sales drop 0.5% y/y during month

US light-vehicle sales in August saw the seasonally adjusted annual rate (SAAR) increase again, to 17.7 million units, although sales in the month slipped 0.5% y/y. In the year to date (YTD), sales were up 3.8% y/y to 11.6 million units. August's SAAR sales were closer to May's 17.79 million units than July's 17.5-million result. The direction of last month's results was expected and, after the strength of the past few months, IHS is increasing its full-year 2015 forecast to 17.2 million units, from 17.1 million units previously.

Detroit automakers

General Motors (GM) continues to reduce fleet sales, including a planned overall reduction of about 60,000 units over the second half of 2015. In August, fleet sales were down 15,000 units, and the company returned a 0.8% y/y decline. Government and commercial sales are not declining, however, and by GM's count, retail sales showed the strongest y/y industry gain in August. However, total sales were flat and YTD sales were up a modest 3.2%. Overall, GM is benefiting from a consumer appetite for SUVs and pick-up trucks. Buick's sales were up only 0.6%, with sales gains for the Enclave and Encore. In the year to date, Buick sales were down 2.6% y/y. At Cadillac, continued struggles for the ATS, CTS and XTS overshadowed a 51% y/y gain by the ageing SRX, and the brand saw sales fall 5.5% y/y in August. Appetite for the Escalade may be waning as well, as sales declined 22.3% y/y. Chevrolet's sales decline was 1.5%. The full-size Suburban saw double-digit declines, though Tahoe sales were flat. The Silverado's sales picked up 11.7% y/y, compared with a 33.9% y/y July gain, and it continues to be the brand's highest-selling model. The Equinox stayed well ahead of the Cruze for the second sales slot in Chevrolet's line-up; the Cruze is due to be replaced later in the year as well. GMC pulled out a 3.5% y/y sales gain, with the Sierra returning a 7.0% y/y gain and the Acadia a 10.2% gain, though all other GMC models saw a decline.

In August, Ford Motor Company saw sales up 5.5% y/y, as supply of the F-150 continues to improve and consumer reaction to the company's newest products is strong. The first eight months of the year included declines in four months, and in the YTD the company's sales were up only 2.7%. In August, sales of cars declined 7.0% y/y and sales of trucks were up 11.3%, while utilities jumped 12.3%, consistent with market trends. Demand for the Ford brand gained 5.4%, with car sales down 6.9% y/y, utilities up 12.0% and truck sales up 11.3%. Lincoln sales picked up 6.0% y/y in August and were up 7.9% for the YTD. The MKC continues to perform well.

Fiat Chrysler Automobiles (FCA) US reported its 65th consecutive month of y/y sales gains, at 1.7% y/y. Car sales were down 9.9%, with trucks and utilities up 4.8%. FCA sold 163,168 truck and utilities, compared with 38,504 cars in August. Ram pick-up demand was up 3.5% y/y. Fiat brand sales continue to struggle, up less than 1% in August and down 11.6% in the YTD. The 500X sold 1.029 units in August, while the 500 declined 38%y/y to 2,054 units. Chrysler brand sales dropped 14.1% for the month to 25,580 units; the 200 continues to see double-digit gains, while the about-to-be-replaced Town & Country is in decline. Jeep accounted for 40.0% of FCA's US August sales, with a 17.5% increase. Dodge brand sales fell 15.0%, including a 26.6% decline in Dart sales.

Japanese automakers

August was not as good for the Japanese automakers in the US, however. Toyota's demand contracted 8.8% y/y in August. This result pulled Toyota's YTD result to 2.8% y/y, from 4.9% at the close of July. Toyota division sales declined 7.1%, with 190,894 vehicles sold. Lexus gained 6.0% in August, and sold 33,487 units, with the all-new NX selling 4,448 units. Toyota Motor Sales' (TMS) pick-up truck and sport utility vehicle (SUV) sales declined 2.8% y/y, while car sales declined 13.8%. In the year to date, TMS sold only 66,442 more cars than trucks, compared with a difference of 184,381 units through August 2014. The Toyota Camry also missed the mark of achieving best-selling-car status for August, falling behind the Honda Accord. Scion continues to see sales erosion, though the all-new iA and iM saw sales launched on 1 September and should encourage demand growth for the brand in the fourth quarter.

American Honda's YTD results were up 1.2% y/y. The Honda division's sales declined 7.5% y/y as the Acura division's declined 1.1.%. Honda's Accord was the best-selling car of the month, and the Civic's sales stayed behind those of the CR-V (32,031 units versus 34,771 units), though the Civic is entering a model changeover period and is likely to continue to see declines. The additional HR-V sold 4,567 units, compared with July's 5,909 units and June's 7,760 units. Acura's MDX saw sales decline 26.9% as an update is transitioned in. The TLX is bringing in sales above those of the prior TL and TSX. Acura's MDX and RDX accounted for 59.5% of brand sales.

Demand for Nissan and Infiniti was basically flat in August, down 0.8%. In the year to date, the company's sales were up 4.2%, crossing the million-unit threshold last month. Nissan brand sales dropped 2.0%, with car sales down 6.8% and truck and SUV sales up 5.7%. Altima remains the best-selling Nissan vehicle, with 32,153 units sold, flat compared to August 2014. Infiniti demand was up an impressive 16.1%, with the QX60 pulling ahead of the Q50's sales (3,995 units compared with 3,839 units). Subaru claimed another record sales month, the 45th consecutive month of y/y growth and the best-ever month in company history, with a modest 4.9 % gain. The Forester and Outback delivered a combined 54.4% of the month's sales. Mazda's August sales were down 4.4%, despite the new MX-5 selling 1,344 units in the month. The Mazda2 and Mazda5 are being phased out, and every model other than the convertible saw a decline in August. Car sales were down 6.6% and SUV sales down 1.1%.

Other automakers

Volkswagen Group saw sales slip 1.2%, pulling the YTD results down. VW brand sales declined 8.1%, generally hurt by a lack of fresh product, particularly in the SUV category. Audi reported its 56th straight month of sales growth, up 9.9%. In August, Porsche sales jumped 10%, with only the 911's declining. Combined August sales for Hyundai (72,012 units) and affiliate Kia (56,311 units), which operate separately, showed a 5.0% gain. Hyundai sales gained 2.9% while Kia's gained 7.7%.

Outlook and implications

In light of the stock market volatility at the end of the month and the absence of Labor Day promotional activity, light-vehicle sales remained strong in August. With a seasonally adjusted annual rate of 17.7 million units, the sales pace for the month was the highest since July 2005, and was motivated by continued momentum within the light truck sector, especially crossover utility vehicles (CUVs) and pick-up trucks. And while Labor Day clear-out events may not have been present, vehicle incentive activity did rise in August, although average transaction prices also moved up, reflecting a healthy environment for both automakers and auto consumers. With sales at such a robust level over the past two months, we will be raising our 2015 sales forecast to 17.2 million units, from 17.1 million units previously, according to IHS sales forecast analyst Chris Hopson.

There were 26 selling days this August, one less than the year-ago period. On a unit volume level, 1.577 million light vehicles were sold, a 0.5% drop compared with year-earlier levels, but very strong considering the selling day discrepancy and lack of Labor Day industry activity, which was present in August 2014.

Hopson notes that automakers' performances in the month reflected both the tough year-before comparisons and some of the underlying segment movements in August – namely strong CUV and full-size pickup sales. Ford sales were up 5.6% for the month, while FCA posted a 1.7% increase, as Jeep brand sales were up 18%. GM posted a moderate 0.7% y/y decline, citing lower sales to daily rental fleets. Outside of Subaru (up 4.9%), the Japanese automakers realised larger volume declines, with Toyota (down 8.8%), Honda (down 6.9%), and Nissan (down 0.8%) all losing market share compared with year-before levels. Hyundai-Kia posted a solid 5.0% sales increase as its CUV sales were up 25.2%.

As has been the case throughout 2015, amplified in August, low fuel prices and continued popularity of CUVs helped monthly light truck sales. Also adding to light truck sector's strength for the month was full-size pick-up truck incentives, at their highest level of the year. For the month, light-truck sector sales were up 8.3%, compared with a 10.3% decline in passenger-car demand, and accounted for 57.3% of total volume for the month, up from 52.6% in the same period last year.

With the strong sales pace of August, month-end vehicle stocks for the industry declined, but the manufacturers' strong production schedules for the third and fourth quarters will likely start to increase stocks quickly. August month-end inventory for GM was down approximately 10,000 units to 655,776 units, and Ford's was down about 2,000 units to 558,000, but that of FCA was up 7,500 units to 571,300, realising a moderate uptick in stock level.