DETROIT (Reuters) - U.S. auto sales in January likely rose 0.8 percent from the same month in 2017 as automakers continued offering high consumer discounts to sell vehicles, industry consultants J.D. Power and LMC Automotive said on Monday.
“The challenge (for automakers) in 2018 will be maintaining incentive discipline, coming off a year when incentive spending per unit reached the highest level ever recorded,” Thomas King, senior vice president of data and analytics at J.D. Power, said in a statement.
January U.S. new vehicle sales will likely be about 1.153 million units, an increase of around 0.8 percent from 1.141 million units a year earlier, the consultancies said.
The forecast was based on the first 16 selling days of January. Automakers will release U.S. sales results for the month on Feb. 1.
U.S. new vehicle sales fell 2 percent in 2017 to 17.23 million units after hitting a record high in 2016 and are expected to drop further in 2018 as interest rates rise and more late-model used cars come back to dealer lots to compete with new ones.
LMC said it expects full-year 2018 U.S. new vehicle sales to hit 17 million units.
The seasonally adjusted annualized rate for January will be 17.1 million vehicles, down nearly 2 percent from 17.4 million units in the same month in 2017, the consultancies said.
Retail sales to consumers, which do not include multiple, lower-margin fleet sales to rental agencies, businesses and government, were set to rise a little over 1 percent in November.
The average discount per vehicle in January hit $3,733, an all-time record for the month.
Discounts hit 10 percent of the manufacturer’s recommended sales prices. Experts believe that anything above 10 percent hurts vehicle resale values and is ultimately unhealthy for the industry.
The consultancies noted that discounts have exceeded 10 percent in 18 of the last 19 months.
Reporting By Nick CareyEditing by Chizu Nomiyama