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Ford and GM Sales Decline as May Steals Days from June

Tickers in this article: F GM

DETROIT ( TheStreet) -- Light vehicle sales in the U.S. in June are expected to show a year-over-year decline of 2% to 3% percent in June, forecasters said, as quirks in the calendar will overshadow the industry's continued strength.

U.S. light vehicle sales gained 11.4% gain in May, which had five Saturdays, compared with four Saturdays in the same month a year earlier. By contrast, June had four Saturdays, compared with five a year earlier. Saturday is a prime day for selling cars. Additionally, June 2014 has 24 selling days, while June 2013 had 26 selling days.

Still, the seasonally adjusted annual sales rate is forecast to total 16.3 million to 16.4 million, up from 15.8 million in June 2013 but down from 16.7 million in May 2014.

"The industry will see lots of year-over-year and month-over-month declines, but that doesn't mean that June was a bad month for sales," says analyst Jessica Caldwell, in a prepared statement. "There were fewer sales days in June 2014 than in June last year or in May 2014 (but) shoppers this month bought 2,700 more cars per day than they bought in June 2013. So the momentum is still very much alive."

In fact, "the U.S. auto market is arguably in the best position and health it has been in since well before the great recession," said LMC Automotive analyst Jeff Schuster in a prepared statement. "Sales are robust and stabilizing above a 16-million-unit pace and are back in balance with production levels, keeping inventory in check. While GDP growth remains below ideal levels, the auto market continues to be instrumental in helping drive the economy."

Forecasters expect June sales of about 1.4 million units, down 2.1 million from June 2013.

"Despite the expected year-over-year dip, the pace of new-car sales remained healthy in June at approximately 16.4 million SAAR," said analyst Jesse Toprak, in a prepared statement. "An attractive collection of new models as well as improved affordability due to very low interest rates and lease specials continued to bring customers into showrooms. We expect the rest of 2014 to continue to track above 16 million units."

Both GM and Ford are expected to show sales declines in June. GM has been plagued by recalls and on June 25 it told dealers to stop selling the Chevrolet Cruze, its best-selling car, because of a potential airbag problem.

For GM, said it expects sales to fall 6.1%, with a market share decline to 18.1%, down from 18.9% a year earlier. Kelley Blue Book expects a decline of 4%. Meanwhile, Ford sales are expected to fall about 7%.

"Ford is preparing to restructure its F-Series factories in preparation for the new aluminum-bodied truck later this year," said Kelly Blue Book analyst Alec Gutierrez. "By implementing changes to its factories, Ford will need to ensure it has enough inventory to last through the transition, potentially pushing sales down in the near-term."