by Calculated Risk on 9/01/2023 06:34:00 PM

Wards Auto released their estimate of light vehicle sales for August: August U.S. Light-Vehicle Sales Rise but Miss Expectations (pay site).

Lean inventory, elevated prices and lukewarm incentives, combined with rising interest rates, could be keeping more buyers out of the market. Some could be waiting for more deals which often was the case in the summer months in most years prior to the pandemic’s start in 2020, as automakers and dealers offloaded excess inventory before widespread availability of next model-year vehicles in the fourth quarter – a strategy not used in recent years, including 2023, due to a lack of excess inventory caused by the pandemic/supply-chain disruptions.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for August (red).

The impact of COVID-19 was significant, and April 2020 was the worst month.  After April 2020, sales increased, and were close to sales in 2019 (the year before the pandemic).  However, sales decreased in 2021 due to supply issues.  The "supply chain bottom" was in September 2021.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Vehicle sales are usually a transmission mechanism for Federal Open Market Committee (FOMC) policy, although far behind housing.  This time vehicle sales were more suppressed by supply chain issues and have picked up recently.

Sales in August were below the consensus forecast.