The pace of U.S. auto sales has slowed slightly after hitting an eight-year high in June, but July’s results are still shaping up to be at least 9 percent better than a year ago, according to four forecasts.
Forecasts from LMC Automotive, Kelley Blue Book, Edmunds.com and TrueCar.com call for a seasonally adjusted, annualized selling rate of 16.6 million to 16.8 million. The SAAR was 17 million in June.
LMC said retail sales in July will be higher than in June, while fleet deliveries will decline nearly 40 percent.
“July’s performance is the clearest indication yet that retail buyers are driving market demand,” Edmunds’ senior analyst, Jessica Caldwell, said in a statement. “Shoppers are looking past news of recalls and rising gas prices and they’re finding affordable interest rates and other incentives that make it easier to buy a new car.”
LMC raised its full-year forecast for the second time in as many months. It now expects 2014 sales of 16.3 million vehicles, up from 16.1 million it was predicting in April. KBB also expects full-year sales of 16.3 million, which would be a 5 percent gain from 2013, while TrueCar increased its forecast to 16.35 million.
Automakers sold 8.16 million vehicles in the first half of the year, up 4 percent from the same period in 2013, with 54 percent of those transactions occurring in the second quarter.
“The automotive industry recovery in the United States … remains ahead of that of the U.S. economy,” Jeff Schuster, senior vice president of forecasting for LMC, said in a statement. “Further upward momentum in light-vehicle remains a strong possibility if the remainder of the year keeps pace with recent months and the expected improvement level in the overall economy is realized.”
TrueCar said incentive spending has declined less than 1 percent from June but has climbed 7 percent from a year ago.
Chrysler Group is expected to post a gain of 22 percent, based on the average of the forecasts by KBB, Edmunds and TrueCar. LMC does not release estimates for individual automakers.
The forecasts call for increases of 13 percent for Nissan North America, 12 percent for General Motors, 10 percent for Toyota Motor Sales U.S.A. and Hyundai-Kia Automotive, 9 percent for Ford Motor Co. and 4 percent for American Honda. Volkswagen Group of America is projected to post a 4 percent decline.
A 12 percent increase likely would give GM a small increase in U.S. market share even after recalling a record 29 million vehicles this year.
GM on Thursday said its dealerships had sold 6,600 vehicles to customers who came in for a replacement ignition switch on their Chevrolet Cobalt, Saturn Ion or other small car. That’s a little more than 1 percent of the roughly 550,000 repairs completed as of Monday. GM has not said how many people covered by the 60 recalls it has announced this year bought a new vehicle.
LMC also increased its 2014 North American production forecast by 200,000 units to 16.8 million, 4 percent more than last year, citing “healthy inventory levels” and higher demand for exports. It said production increased 1 percent year over year in the second quarter to more than 4.3 million vehicles, including 1.4 million in June.
However, Morgan Stanley analyst Adam Jonas said automakers should remain cautious in the coming months.
In a report today, Jonas wrote: “The signs are increasingly evident that the U.S. light-vehicle market is moving from pull to push, with the ease of buying a car at a low monthly payment both a powerful and familiar aphrodisiac in the cycle.”