U.S. sales expected to fall in Oct. for third straight month

U.S. new-vehicle sales are expected to decline for a third consecutive month, but the industry’s selling rate could reach its highest point of the year because of the way October falls in the calendar.Forecasts from LMC Automotive, TrueCar, Edmunds.com and Kelley Blue Book show sales falling 6 to 8 percent from a year ago. That would be a better performance than it appears because October has two fewer selling days than it did in 2015. Analysts said Hurricane Matthew also slowed sales in the Southeast early in the month.The forecasts translate to a seasonally adjusted, annualized selling rate of 17.7 million to 17.9 million. That compares to 17.74 million last month and 18.15 million a year ago.“Considering that there are no popular weekend sales events in October, automakers and dealers can feel encouraged by this month’s performance as they head into what they hope will be a busy holiday season,” Jessica Caldwell, a senior analyst with Edmunds.com, said in a statement.Even the most optimistic of the four forecasts would result in year-to-date sales falling just below the first 10 months of 2015. That would be the first time 2016 has come up short of last year’s record-setting pace. However, some of that could be made up in November, which has two more selling days than a year ago and often marks the beginning of year-end clearance promotions.Automakers are scheduled to report October sales on Tuesday, Nov. 1.J.D. Power, which jointly develops LMC’s forecast, said it expects retail sales to fall 7.9 percent, which would mark the sixth decline in the past eight months.“The fact that this will be the sixth monthly decline in 2016 puts the industry in territory not seen since before the recession,” John Humphrey, senior vice president of the global automotive practice at J.D. Power, said in a statement.“We do not foresee a large pullback in sales in the near term, but the fact that retail sales are beginning to contract, despite high incentives and extremely low interest rates and gas prices, is a clear indicator that this cycle has reached its peak.”Production cutsTotal sales declined in each of the last two quarters. As a result, Ford Motor Co. and other automakers have been cutting production to keep inventories from getting too big.Incentives also are on the rise as demand flattens out. Both TrueCar and J.D. Power said incentive spending is down slightly from September but up at least 12 percent from a year ago.“As retail demand plateaus, automakers will be forced to make the critical decision to cut vehicle production or increase incentives,” Eric Lyman, TrueCar’s chief industry analyst, said in a statement. But he added: “There’s still gas left in the tank for automobile sales that should remain strong through the rest of 2016.”Declines forecastThe forecasts project declines of 10 to 11 percent for Ford, 6 to 9 percent for General Motors and 8 to 11 percent for Fiat Chrysler Automobiles. Toyota Motor Sales U.S.A., American Honda, Nissan North America and Hyundai-Kia are expected to post volume declines but gain market share.Subaru, which has achieved 58 consecutive monthly gains, could see that streak end, with KBB forecasting a 1.2 percent decline. But TrueCar projects Subaru will eke out a 0.7 percent gain.Volkswagen Group of America is likely to report about a 17 percent drop as it continues to feel the effects of its diesel emissions scandal, according to TrueCar and Edmunds.

U.S. sales expected to fall in Oct. for third straight month

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