PhotoConsumers continue to flock to new car showrooms, but in fewer numbers this month. With October drawing to a close, industry analysts are predicting sales will be down as much as 6% from October 2015.

But that doesn't mean the industry is hurting. If you'll recall, last October was a huge month for car dealers, as new car sales set records month after month. Besides, Kelley Blue Book (KBB) notes there were some extenuating circumstances this month – two fewer selling days than last year.

But KBB analyst Tim Fleming says the preliminary sales numbers show a drop in volume across the entire industry, with dealers and manufacturers having to work harder to close sales.

"Higher incentives are helping boost sales, but with transaction prices at an all-time high and great consumer demand for SUVs and trucks, which are more profitable, automakers can afford the extra incentives,” Fleming said. Still, discipline with incentives and moderating production will go a long way in preserving residual values in the next few years."

Edmunds.com, meanwhile, predicts a slightly better industry performance, with October sales down just 5.2%.

"On the surface, it might look like a slow month for sales, but in fact the industry's performance was much stronger than the raw numbers suggest," said Edmunds.com Senior Analyst Jessica Caldwell.

What's hot and what's not

Monthly sales figures can be useful for consumers thinking about a new car purchase because it can show where the bargains are and are not. For example, a make and model that is in demand will have less wiggle room during a negotiation. A model that lags in sales might be purchased at more of a bargain price.

Going forward, that could make Volkswagen a good buy. Preliminary sales data shows VW continues to lose marketshare in the wake of the 2015 diesel emissions cheating scandal. Its sales this month are expected to be down nearly 10% from last October, the first month after the scandal broke.

"Upcoming SUV launches, including the redesigned Tiguan and an all-new three-row SUV, will certainly help Volkswagen's car-dominant lineup once they hit the market, and that can't come soon enough for Volkswagen dealers,” Fleming said. Importantly, the Audi and Porsche brands have not been affected by the scandal, as sales for those two brands are up year-over-year."

Subaru still hot

While consumers might negotiate an attractive deal on a VW, it might be harder to get a low price on a Subaru, which remains a sales leader. Preliminary numbers show Subaru increased its marketshare from 3.6% to 3.8% this month, even with slightly fewer sales than in October 2015.

KBB notes Subaru has the fastest-selling inventory, lowest days' supply of vehicles, and the fewest incentives of any major brand.


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