Auto Sales Expected to Slow Down as Confidence Wanes
Halfway through the year and with the economy once again slowing down, automakers and dealers are re-thinking their once ambitious forecasts for sales this year.
For much of the first half of this year, auto executives were confident the industry would sell just more than 13 million cars, trucks and SUVs this year.
A few, most notably AutoNation CEO Mike Jackson dialed their expectations back in the spring when the Japanese auto supply chain was crippled. Still, the prevailing sentiment in the industry was, "don't worry, we'll hit 13 million this year, easy."
Seems some in the industry aren't so sure anymore. In the last two weeks more than a few in business have told me they're concerned sales have leveled off and will grow at a slow pace the rest of this year.
Nobody's hitting the panic button, but they are more cautious.
Who can blame them. Last month's sales pace of 11.45 million vehicles was down about 1 percent from May. Yes, the tight supply for Japanese auto makers caused many buyers to sit tight and wait until there is a greater selection of the car they want.
But a bigger issue is consumer confidence. As it flags, so are auto sales.
As long as the jobs picture stays bleak, many people are delaying buying. Last week a survey by Car MD found just 12 percent of those surveyed were planning to buy a vehicle this year.
Almost half said they'd be buying because the have to. In other words, a lot of people are sticking with current wheels.
No wonder dealers are increasingly frustrated. This is not the recovery many envisioned. And unlike years past when goosed incentives could get people into the showroom, in this economy that move has only limited appeal. This is about jobs, confidence and realizing a lot of buyers are holding off on signing up for a monthly auto payment.
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