July auto sales based on mid-month totals look grim despite record incentives. Industry analysts J.D Power and LMC estimate U.S. July auto sales down 5 percent.

Declining sales will pad the already large inventory numbers piling up on dealers lots.

DETROIT (Reuters) – U.S. auto sales in July likely fell a little more than 5 percent from the same month in 2016, a fifth consecutive month of declining sales and the largest monthly drop so far this year despite persistently large consumer discounts, industry consultants J.D. Power and LMC Automotive said on Thursday.
LMC cut its full-year 2017 forecast for new vehicle sales for the fourth consecutive month, to 17.0 million units from its previous forecast of 17.1 million.

July U.S. new vehicle sales will be about 1.44 million units, a drop of more than 5 percent from 1.52 million units a year earlier, the consultancies said.

The forecast was based on the first 18 selling days of July. Automakers will release U.S. sales results for the month on August 1.

The seasonally adjusted annualized rate for the month will be 17.2 million vehicles, down nearly 4 percent from 17.9 million units in the same month in 2016.

Retail sales to consumers, which do not include multiple fleet sales to rental agencies, businesses, and government, were also set to decline more than 5 percent in June.

Consumer discounts hit a monthly record of $3,876, above the previous record of $3,597 set in July 2016.

Despite the high level of consumer discounts, the average new vehicle sold in July had spent 72 days in inventory. This was the highest level since 2009 during the height of the Great Recession.

Advance Inventories

Earlier today I commented “This inventory build is unwarranted in light of actual retail sales. These numbers will likely boost second quarter GDP substantially. Expect a substantial payback in the third quarter.”