BUSINESS

Austin consumers tap brakes on auto sales in August

Lori Hawkins
lhawkins@statesman.com
Central Texas dealerships sold 10,798 new cars and trucks in August, down 14 percent from a year ago, according to Freeman Auto Report. [AMERICAN-STATESMAN FILE]

Austin-area consumers throttled back on auto purchases in August, according to a new industry report.

Central Texas dealerships sold 10,798 new cars and trucks last month, according to Freeman Auto Report, a Dallas-based company that tracks auto sales in Travis, Williamson, Hays, Bastrop, Blanco, Burnet and Caldwell counties. That's a 14% decline from the same month a year ago, when dealers recorded 12,543 purchases.

The August sales numbers also were a 16% decline from July, which posted a strong performance with the sale of 12,876 vehicles.

During the first eight months of the year, Austin-area dealers have sold a total of 82,787 new vehicles, which is down 2% from the first eight months of 2018.

Auto sales are considered a key indicator of an area's consumer confidence, as purchases of big-ticket items tend to indicate consumers aren't worried about their jobs or the state of the economy.

Austin's unemployment rate is currently less than 3%, according to the Texas Workforce Commission. The Federal Reserve Bank of Dallas recently revised upward its estimate of first-quarter job growth in the Austin area, pegging the figure at 3.6%, double its initial estimate of 1.8%.

Nationally, 1.6 million new cars and trucks were sold in August, which is a 7% increase from August 2018 and a 14% increase from July 2019.

"Market conditions are looking slightly more favorable than earlier this year thanks to a minor dip in interest rates, but we don't expect that to cause a major turnaround," said Jeremy Acevedo, Edmunds' senior manager of insights. With Labor Day weekend falling earlier this year, "August really just stole sales that are normally attributed to September."

The average interest rate for a new vehicle loan stayed under 6% for the second month in a row in August, according to Edmunds. Zero percent finance officers saw a slight lift in August, making up 6.1% of purchases in August compared to 5.8% of purchases in July.

"Shoppers who made it to the dealership this Labor Day weekend got to take advantage of slightly more generous offers than we've been seeing all year, but this shouldn't be taken as a sign of a dramatic turnaround in the market," said Jessica Caldwell, Edmunds' executive director of industry analysis. "The model-year sell-down is still in full swing, and automakers and dealers are moving things along just like they should at this time of year.

The best-selling brand in the Austin metro area in August was Ford, which sold 803 cars and 792 trucks for a total of 1,595 vehicles, according to Freeman. (Car totals include sport utility vehicles.)

That was followed by Chevrolet with 1,544 total sales, Toyota with 1,216 sales, Honda with 901 sales and Nissan with 764 sales.