Feb 26 (Reuters) - U.S. auto sales are expected to rise about 6.4% in February from a year earlier, boosted by higher incentives and consumer spending, industry consultants J.D. Power and LMC Automotive said on Wednesday.
The consultancies expect total U.S. vehicle sales of about 1.32 million units in the month, while retail sales of new vehicles is estimated to rise 8.5% to 1.02 million units.
The auto consultants said incentive spending is on pace to reach $4,179 in February, an increase of $293 from last year, encouraging consumers to spend about $34.7 billion on new vehicles, up by $3.6 billion.
“While the coronavirus has had no meaningful effect on production yet, it does have the potential to reduce overall inventory levels and lower the need for continued elevated incentives,” said Thomas King, senior vice president of the data and analytics division at J.D. Power.
However, if unhealthy inventory levels persist in 2020, manufacturers may be faced with spend levels that are pacing towards $5,000 by next year, King added.
“Uncertainty seems to be the buzz word for the auto industry right now, even if the causes change. While we expect the light vehicle market to decline further in 2020, the factors that play a part in that decline are numerous,” said Jeff Schuster, President, Americas Operations and Global Vehicle Forecasts at LMC.
Schuster added that a slowing U.S. economy and higher transaction prices were already contributing to the headwinds.
J.D. Power and LMC Automotive said they expect total light-vehicle sales for 2020 to be 16.8 million units, a decline of 1.1% from 2019. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Devika Syamnath)