June Auto Sales Deliver Summer Relief
Despite concerns a sluggish U.S. economy could keep people away from showrooms, automakers are reporting stronger than expected June sales.
While June auto sales for many auto makers slowed down compared to May, they also came in better than expected.
Here's a look at the numbers:
- GM up 15.5%
- Ford up 7.7%
- Toyota up 60.6%
- Chrysler up 20%
- Nissan up 28.2%
- Hyundai up 8%
- Volkswagen up 34.2%
Kurt McNeil, the VP of Sales for GM says the automaker is seeing headwinds, including slow job growth, lagging consumer confidence, and a still weakened housing market. “The availability of consumer credit is good so, you know, we see headwinds out there, but at the same time continued moderate growth,” McNeil said.
The question is whether the sluggish economic recovery will cause auto sales to stall.
Most believe that’s unlikely to happen. And with the June sales pace expected to come in at or above 14 million vehicles, analysts are unlikely to change their full year sales estimates. After the strong start to the year with the sales pace even hitting 15 million vehicles many analysts revised their full year sales higher. Those estimates have increasingly come under pressure.
So what drove sales in June?
Pent-up demand is still the primary driver given the fact the average age of a vehicle in the U.S. is now 11 years. Dealers are also seeing slightly more aggressive incentives to bring in buyers on the fence. As for falling gas prices, it’s unlikely they were the reason people bought a new car or truck, though they may have a prompted more Crossover and SUV sales. Ford reports SUV/CUV sales jumped 25% in June.
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