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Investing.com -- Deutsche Bank (ETR:DBKGn) analyst Edison Yu has adjusted predictions for the U.S. auto industry, now estimating the March U.S. light vehicle Seasonally Adjusted Annual Rate (SAAR) to hit around 16.9 million units. This forecast is a notable rise from the 16.3 million units in February and 15.4 million units in March 2024.
The bank projects total sales growth of 4.5% year-over-year, with a significant 38.4% jump in fleet sales. However, retail unit sales are expected to drop by 1.6% compared to the previous year.
Mid-month data implies that the average transaction price (ATP) for the industry in March is lower month-over-month at approximately $44,500, a marginal 0.7% increase year-over-year. Incentives have seemingly dropped by 5.3% month-over-month to around $2,993, despite a 5.9% increase year-over-year in March.
Among the Detroit Big Three automakers, only Ford has seen a price increase month-over-month, while both General Motors (NYSE:GM) and Stellantis (NYSE:STLA) have experienced price decreases exceeding 1%. Nevertheless, incentives as a percentage of ATP have decreased for all three companies.
Looking forward, the analyst predicts that sales in April and May will be strong as consumers may rush to buy vehicles ahead of expected price increases due to new tariffs. However, sales are projected to decline in the second half of the year as higher costs begin to affect the market. As a result, Deutsche Bank has reduced its 2025 SAAR forecast by about 500,000 units to 15.4 million, down from the previous prediction of 16 million.
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