Reading the Tea Leaves on June Auto Sales
DETROIT (TheStreet) -- The slowdown in auto sales that began in May is continuing into June, according to newly released sales analyses. But experts disagree on what June retail sales say about the economic outlook.
Based on retail sales for the first 17 days of the month, J.D. Power is suggesting that the outlook is improving, while Edmunds.com, analyzing data for the first 18 days, says the outlook is weakening. Retail auto sales are a key economic indicator because they reflect consumer willingness to make major purchases.
J.D. Power projects June retail sales of 994,800. That translates to a seasonally adjusted annualized rate of 11.9 million for retail sales, and an overall SAAR, including fleet sales, of 13.9 million, up from 13.7 million in May. In May, the SAAR slipped below 14 million for the first time this year.
"We're seeing healthy retail sales growth as we head into the summer selling season and as automakers change over to the 2013 model-year vehicles," said John Humphrey, J.D. Power senior vice president of global automotive operations, in a prepared statement. "Many major manufacturers are posting year-over-year retail sales gains this month, while maintaining strong new-vehicle prices." The firm said total sales are 16% ahead of June 2011.
Edmunds projects June retail sales will total around 993,000 units, which translates to a retail SAAR of 10.9 million vehicles and an overall SAAR of 13.4 million.
"Memorial Day weekend sales were disappointing, which resulted in a drop in the sales pacing for the last week of the month," wrote Jeremy Anwyl, Edmunds vice chairman, in a commentary. "This lower pacing has continued into June."
Toyota produced a 5% overall market gainin May.
For the full month, J.D.Power projects total light vehicle sales of 1.27 million, while Edmunds projects total light vehicle sales of 1.22 million.
Whatever the resolution, it is safe to say that the pace of auto sales has slowed from earlier in the year. In a report issued June 6, Standard & Poor's noted that the May SAAR of 13.7 was below its full-year 2012 assumption of 14.2 million. May was the first month this year that fell below an annual pace of 14 million.