U.S. auto sales remain robust in June
U.S. auto sales have shown no signs of weakening this month after a blowout performance in May, with forecasters projecting an industrywide gain of about 5 percent to close out the best spring in a decade.
Forecasters at LMC Automotive and Kelley Blue Book each raised their full-year sales forecasts to 17.1 million, matching TrueCar. Sales are on pace to surpass 8.5 million units in the first half of the year -- marking the industry’s best first half and second quarter since 2005, when employee-discount-for-everyone deals caused a surge in demand.
“This is arguably the strongest and healthiest the auto industry has been in a very long time,” Jeff Schuster, senior vice president of forecasting at LMC, said in a statement.
“A green light outlook across a basket of metrics -- including economic support, gas prices, the stock market, higher and stable transaction prices and significant product activity -- is behind our forecast of a 17.1 million unit pace in the second half of 2015.”
LMC estimates consumer spending on new vehicles in the first half of 2015 to reach a record $206.2 billion, $11.6 billion more than the same period last year.
17 million in sight
Sales are expected to total about 1.5 million in June, which would result in a first-half gain of 4.7 percent. To hit 17 million for the year, a threshold last crossed in 2001, sales in the second half would need to rise just 1.1 percent from year-earlier levels.
TrueCar and KBB each project the industry’s seasonally adjusted, annualized selling rate to be 17.4 million in June. That would be less than May’s rate of 17.8 million -- the best May on record -- but more than the June 2014 rate of 16.9 million.
Edmunds today said it expects a June SAAR of 17.3 million, while LMC projects 17.2 million. June has one more selling day this year than it did in 2014.
“The auto industry has maintained most of the strength it flexed during its record-breaking May,” Jessica Caldwell, Edmunds’ director of industry analysis, said in a statement. “In many parts of the country, we saw May’s deal offers extend well into June, and Fourth of July promotions should start as early as next week. These sales messages are helping to sustain the industry’s momentum into the first few weeks of summer.”
Sales could begin to flatten out later in the summer, said Alec Gutierrez, KBB’s senior analyst. At the pace seen during the first half, full-year sales would surpass 17.3 million, approaching the record of 17.4 million set in 2000.
Fiat Chrysler Automobiles, Nissan North America and Subaru could each post double-digit gains in June, forecasters said.
KBB projects FCA’s market share to reach 12.6 percent, its highest level since 2007.
Forecasts for General Motors are mixed; TrueCar and KBB show its market share roughly flat from a year ago, while Edmunds expects GM to post a slight sales decline and lose a full point of share.
Ford Motor Co. and Hyundai-Kia Automotive may each lose as much as half a point of market share. Toyota Motor Sales U.S.A. is expected to post a sales increase that’s in line with or slightly below the industry average.
“With the exception of comparatively low demand for conventional compact and midsize sedans, June sales look solid across the industry,” TrueCar President John Krafcik said in a statement. “Our dealer partners should see a very strong close to the month.”
TrueCar said incentive spending is averaging $2,846 per vehicle, 3.6 percent more than a year ago and 0.4 percent higher than May.
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