June Car Sales on Track for Strong Finish
Car sales continue at a healthy pace as June may well close as the third-highest volume month the industry has seen since 2008. Edmunds.com forecasts June car sales of 1.27 million vehicles for a Seasonally Adjusted Annual Rate (SAAR) of sales at 13.9 million light vehicles.
The 1.27 million vehicle sales would be behind March of this year, when sales were an unexpectedly high 1.4 million vehicles due to the mild winter weather and stronger economic prospects at the time, and May, traditionally the highest volume sales month of the year, at 1.33 million. On a year-to-year comparison, June sales likely will be up about 21 percent from June 2011.
Executives of Ford and Chrysler agreed this week that sales are running at about the same pace as in May. Reid Bigland, Chrysler's head of U.S. sales, told reporters Thursday that June will see about the same 13.8 million SAAR as May. Similarly, Mark Fields, Ford Motor Co. president of the Americas, in talking with reporters Tuesday, put the SAAR in the "high 13 million" range. "While a 13.9 SAAR is not as impressive as the performance in the first quarter of this year, this month's results are still strong, said Edmunds.com Senior Analyst Jessica Caldwell. "The healthiest sign for the industry is the pure volume of sales. June is expected to be the third highest-selling month since 2008."
Another healthy sign is the sales aren't being driven by beefy incentives, which are unhealthy for automakers. Edmunds.com estimates average incentive spending per vehicle by automakers, which have been spending at relatively low levels throughout the year, was less this June than last June and lower than in May.
Based on the sales transactions gathered by Edmunds.com, June started out sluggish following a soft Memorial Day Weekend, but car sales gained steam throughout the month. A strong close of the month is expected this weekend thanks to Fourth of July promotions. Some of the promotions end July 2 but still others recently were extended through July 9.
Making a comeback in June after the March 2011 earthquake and tsunami in Japan, Toyota and Honda will be the biggest gainers in year-to-year comparisons. Edmunds.com forecasts Toyota sales will soar 66 percent in June compared with last June, and Honda will be up more than 50 percent from a year ago. Both Toyota and Honda are back to more normal vehicle inventory levels and are aggressively merchandising their vehicles. Chrysler is expected to have another double-digit increase of nearly 23 percent, though that is not nearly as huge a jump as past year-over-year comparisons. General Motors and Ford are likely to eke out smaller single-digit gains.