Houston Vehicle Sales Decline in September Amid Rising Prices and Ongoing Concerns

 

Houston Vehicle Sales Decline in September Amid Rising Prices and Ongoing Concerns

Houston Vehicle Sales Decline in September Amid Rising Prices and Ongoing Concerns

Houston, Texas - In a challenging month for the local auto market, new vehicle sales in the Houston area saw a significant drop in September. The decline was attributed to several factors, including a rise in average retail prices, persistently high interest rates, and ongoing concerns stemming from an auto workers' strike.

According to data from the TexAuto Facts Report, published by Houston-based InfoNation, a total of 26,394 new vehicles were sold in the region last month. This represents a substantial 23.5% decrease from the 34,503 vehicles sold in August. Additionally, it's a 5% drop compared to the 27,775 cars and trucks sold in September 2022, even though last September had one extra selling day compared to September 2023, which had 25.

The decline in sales extended to the truck and SUV segments, which together account for more than 77% of all sales. In September, 18,424 of these vehicles were sold, a noticeable decrease from the 24,385 sold in August and 20,084 in September 2022.

One of the key contributors to the sales decline was the increase in the average retail price of new vehicles at Houston-area dealers. In September, the average retail price reached $52,055, compared to $50,908 in August 2023, resulting in a twelve-month average retail price of $52,040. The combination of high prices and elevated interest rates has led some customers to consider used vehicles as an alternative.

RoShelle Salinas, the executive vice president of the Houston Automobile Dealers Association, suggested that the September sales drop might partially reflect an uptick in new car purchases during the summer, when prices experienced some moderation. She stated, "We're probably at a little bit of a stabilization."

A significant portion of customers finance their new vehicles, with Experian's quarterly report revealing that almost 80% of customers opt for financing. In the second quarter of the year, these customers faced an average annual percentage rate of 6.63%, resulting in average monthly payments exceeding $700 nationwide.

While the supply-chain issues that plagued the auto industry in previous years have improved, the lingering effects continue to affect the market. According to Ivan Drury, director of insights for Edmunds.com, the past new-car shortage has led to fewer nearly-new used models available for sale, impacting the overall used vehicle market, including the lower end. Drury noted that the demand for gently used cars remains strong.

The ongoing United Auto Workers strike, which began on September 15, has also raised questions about the vehicle market. However, the Greater Houston Partnership has noted that the impact on consumers has yet to be fully documented.

Despite the sales dip in September, Houston-area dealers managed to sell 272,850 cars, trucks, and SUVs in the first nine months of the year. This represents a 14.7% increase compared to the same period in 2022, highlighting the underlying strength of the Houston automobile market.