"Hurricanes Harvey and Irma have disrupted—and will continue to disrupt—new-vehicle retail sales in September and beyond," said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power.  "While, on a national basis, September month-to-date sales are down 0.8% from last year,  in the South Central region, which includes Houston, sales are up 14% as shoppers replace storm-damaged vehicles and complete purchases that were postponed during the storm.  In contrast, sales in the Southeast region, which includes Florida, are down 16% as the region and its vehicle retailers begin to return to normal operations."

The sales decline in the Southeast will be reversed in the coming weeks as buyers completed delayed purchases, but the recovery will likely spill over into October.

Incentives have reached all-time highs as manufacturers continue with aggressive discounting to clear out record inventories of prior model year vehicles.  Average incentive spending per unit to date in September has set a new record at $4,050, surpassing the previous high of $4,024 in November 2016.  New model year vehicles account for just 17% of sales so far in September, compared with 28% last year.

"While the industry will benefit from additional replacement demand from storm damaged vehicles in the coming months, elevated incentives remain a threat to the overall health of the industry," King said.

• The average new-vehicle retail transaction price to date in September is $31,058, a record for the month, surpassing the previous high for the month of $31,024 set in September 2016.

• Consumers are on pace to spend $37.7 billion on new vehicles in September, a record for the month and more than $0.5 billion than last year's level.

• Average incentive spending per unit to date in September is $4,050 per unit, a record for the industry, and surpassing the previous high for the month of $3,939 set in September 2016. Spending on trucks and SUVs is $4,044, up $206 from last year. Spending on cars is $4,062, down $38.

• Incentives as a percentage of MSRP are at 11.1% so far in September, exceeding the 10% level for 14th time in the past 15 months.

• Trucks account for 65% of new-vehicle retail sales through Sept. 24—the highest level ever for the month of September—making it the 15th consecutive month above 60%.

• Days to turn, the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer, is 75 through Sept. 24. This is the highest level since July 2009 (80 days).

• Fleet sales are expected to total 220,200 units in September, down 11.2% from September 2016 on a selling day adjusted basis. Fleet volume is expected to account for 15% of total light-vehicle sales, down from 17% in September 2016.

Jeff Schuster, Senior Vice President of Forecasting at LMC Automotive, said, "The effect of hurricanes Harvey and Irma is expected to boost retail light vehicle demand through the remainder of 2017 and into 2018, as recovery continues. With the need to replace 500,000 or more damaged or destroyed vehicles, the U.S. auto market slowdown will see some relief as demand over the next 6-9 months will likely be upwardly distorted. In addition, a short-term increase in fleet sales may also be an outcome as current shortages are replenished. However, this does not change the overall expectation of level to weaker demand in the U.S. over the next 2-3 years."

Driven by vehicle replacement need, LMC's outlook for 2017 total light-vehicle has been increased by 70,000 units to 17.1 million. The retail light-vehicle outlook has been increased to 13.9 million units from 13.8 million. As part of the increase in retail sales, we have made a minor adjustment the the retail/fleet pattern for the remainder of 2017. Retail sales are expected to be down 1.4% from 2016, while fleet volume is projected to contract by 8.0% this year.