U.S. new-vehicle retail sales continue their slide in October, falling 0.8% from a year ago on a selling-day adjusted basis, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail sales are projected to reach 1,099,200 units in October, the sixth time in the past eight months that sales have fallen on a year-over-year basis. Total new-vehicle sales are projected to fall 0.2% in October to 1,347,000.

John Humphrey, senior vice president of the global automotive practice at J.D. Power, said: "The decline in retail sales this month, compared with October 2015, is relatively modest, but the fact that this will be the sixth monthly decline in 2016 puts the industry in territory not seen since before the recession. 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."

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: "Although automotive sales are expected to remain near the all-time high, they are still expected to contract slightly this year, as well as in 2017. During the same period, nearly 30% of all models in the market will be new entries or completely redesigned, creating challenging conditions for vehicle manufacturers and automotive suppliers that will test the discipline of the industry for the first time since 2009. So far, automakers are adjusting production levels to manage inventory."

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

¹Figures cited for October 2016 are forecasted based on the first 13 selling days of the month.
²The percentage change is adjusted based on the number of selling days in the month (26 days in October 2016 vs. 28 days in October 2015).

• The seasonally adjusted annualized rate for retail sales in October 2016 is projected to reach 14.3 million units, down from 14.8 million units in October 2015. The SAAR for total sales is projected at 17.7 million units in October 2016, down from 18.1 million units a year ago.

• Fleet sales are expected to be 12,000 units lower than a year ago at 247,800 in October, but an increase of 2.7% on a selling-day adjusted basis from October 2015. Fleet volume is expected to account for 18.4% of total light-vehicle sales.

• The average new-vehicle retail transaction price thus far in October is $31,383, a record for the month surpassing the previous high of $30,921 set in October 2015. Incentive spending thus far in October is $3,726 per unit, below the record $3,921 set in September, but 12% above the $3,332 of October 2015.

• Trucks account for 62.2% of new-vehicle retail sales so far in October, poised to set a record for any month. The current record is 61.4% set in September.

• The model-year transition is slower in 2016 than it was a year ago, with 37% of retail sales thus far in October being 2017 model-year vehicles. During the same period in October 2016, 40% of sales were 2016 model-year cars and light trucks.

• Retail sales year to date through the end of October are expected to be down 1.1%, compared with the same period in 2015, while total sales remain positive with volume expected to be up 0.5%.

• LMC Automotive's forecast for full-year total light-vehicle sales is holding stable at 17.4 million units, a 0.2% decline from 2015. The forecast for retail light-vehicle sales remains at 14.0 million units, down 1.5% from 2015.