ALG, a subsidiary of TrueCar, projects total new-vehicle sales will reach 1.39 million units in July, down­ 2.9% from a year ago when adjusted for the same number of selling days.

This month’s seasonally adjusted annualized rate (SAAR) for total light-vehicle sales is an estimated 16.6 million units. Excluding fleet sales, ALG expects U.S. retail deliveries of new cars and light trucks to be 1.19 million units, a decrease of 5.2% from a year ago when adjusted for the same number of selling days.

“Despite buoyant market fundamentals, auto sales are being pulled back by lower incentives,” said Oliver Strauss, chief economist for ALG. “SAAR, however, has fluctuated in 2019 more than in previous years, pointing to some uncertainty about the remainder of the year.”

Among other takeaways from ALG’s data analysis:

• Despite industry sales being down year-over-year, Hyundai had a strong month, up 6.2%. Trends on the TrueCar platform indicate that Hyundai is increasingly winning over new-car buyers who are cross-shopping other brands, particularly buyers who also are considering Toyota and Subaru models.
• Tesla continued its sales ascent, up 67.5% year-over-year, driven by Model 3 sales.
• Automaker average incentive spend will reach $3,671, down 2.6% or $97 year-over-year, and down 4% or $151 from June. The most notable declines in incentive spend will come from Kia, down 17.8%; Toyota, down 9.3%; and Subaru, down 9.1% year-over-year. Meanwhile, Honda raised incentives by 4.2% and BMW by 3.4%.
• Average transaction price (ATP) should continue to rise, up 2.7% or $897 year-over-year.
• Incentives as a percentage of average transaction price are expected to be 10.8%, down 5.1% from a year ago and down 2.8% from June.
• Volkswagen and Mercedes stood out this month in ALG’s brand-strength metric for mainstream and luxury brands respectively, largely driven by new or redesigned product. Volkswagen’s Tiguan received a major refresh for 2019 and the Atlas was added as a new model to the Volkswagen line-up. Mercedes was buoyed by the all-new GLE SUV and its new entry-level A-Class Sedan.
• Used-vehicle sales for July are expected to reach 3.3 million units, down 0.8% year-over-year and flat from June.

“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, chief industry analyst at ALG. “Hyundai has been a prime example of this trend; they’ve been able to capture sales in a declining sales environment by attracting shoppers from other brands.”