July’s projected 2.9% decline in new light vehicle sales to 16.6 million units at a seasonally adjusted annualized rate (SAAR) is fueled largely by automakers’ decline in incentive spending, said Oliver Strauss, chief economist at ALG, noting that the SAAR has fluctuated more in 2019 than in previous years.
In fact, automakers’ average incentive spending is projected to fall 2.6% from the same prior-year period to $3,671, according to ALG data published on Friday. Kia Motors posted the highest decline in incentive spending, down 17.8% year over year. Toyota Motors and Subaru were next behind the Seoul-based automaker, down 9.3% and 9.1%, respectively.
Despite a 7.8% year-over-year decrease in incentive spending, Hyundai Motor Company is projected to post a 6.2% year-over-year increase in sales, according to the data.
“With a tightening of consumer demand and automaker incentives, savvy car buyers are likely holding out in anticipation of better deals or widening their consideration set to get the most value,” said Eric Lyman, ALG’s chief industry analyst. “Hyundai has been a prime example of this trend, as they have been able to capture sales by attracting customers from other brands.”
This month, Hyundai is offering financing options ranging from 0.0% APR to 2.9% APR on new vehicles for up to 60 months, according to the company’s website.