By on June 24, 2011

After sifting through the returns from their dealers that supply real time transactional data , Edmunds now projects a Seasonally Adjusted Annual Rate (SAAR) of 11.9 million vehicles, for June, just a smidgen higher than May’s 11.8 million. Edmunds sees 1,093,000 new cars change hands, which would be 11.2 percent more than June 2010.  A week ago, Edmunds was still hoping for a 12.3 million SAAR, “if the month ends strong.” Looks like it is not ending as strong as hoped.

TrueCar sticks with a forecast of 12.17 million  SAAR for June. “Uncertainty in the economy as well as high gas prices and shortages in small car inventory contributed to the limited gains in sales in June. ” said Jesse Toprak of Should his 12.17 million prediction not be dead on, Toprak does not expect sales to go below 11.9 million SAAR level. “

Price increases and inventory shortages “have made it more likely for consumers to delay their new car purchases through the early part of the summer,” said Chief Economist Lacey Plache. “But as prices and inventory return closer to normal levels by September, many of those lost sales can be made up by the end of this year when consumers return to the market.”  This could be the chance for the Japanese to recover lost ground.

June Market Share Predictions

Truecar Edmunds
Jun ’11 Change Jun ’11 Change Jun ’10
Chrysler 11.1% 1.7% 10.7% 1.3% 9.4%
Ford 17.6% -0.3% 17.9% 0.0% 17.9%
GM 19.9% 0.1% 20.9% 1.1% 19.8%
Honda 8.2% -2.6% 8.1% -2.7% 10.8%
Hyundai/Kia 10.7% 2.2% 10.2% 1.7% 8.5%
Nissan 7.2% 0.6% 7.4% 0.8% 6.6%
Toyota 11.3% -3.0% 11.0% -3.3% 14.3%

As you can see from this table, Toyota and Honda are still reeling from the tsunami-induced effects, while Nissan already has recovered. Who is really picking up sales is Hyundai/Kia.

Edmunds is projecting a 10.2 percent market share for Hyundai and Kia in June, which would be their highest combined market share in history. TrueCar even gives the Koreans 10.7 percent. What does not seem to happen is the wholesale desertion from Japanese to American ranks. Oddly enough, Chrysler picks up the most share, while Ford and GM are generally missing their chance to exploit the logistical weakness of the competition.

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18 Comments on “June Forecasts Not Hot...”

  • avatar

    You quote this ” A week ago, Edmunds was still hoping for a 12.3 million SAAR, “if the month ends strong.” Looks like it is not ending as strong as hoped.”

    However since almost one quarter of the month still is left (with a weekend) then it is only an assumption on the author’s behalf. Why jump the gun – just wait one week and we will know.

    • 0 avatar

      “Looks like” is not an assumption. It is an observation.

      “Will not” would be an assumption.

      These models are here to predict something with a certain degree of certitude. In the business, this is worth a lot.

      • 0 avatar

        I agree with Bertel. Forecasters are pretty accurate because they have decades of sales data that set normal precedence for annual buying patterns. So, unless a great upset occurs that would cause the remaining population to run out and buy a new car between now and the end of this month, the accompanying model and chart are going to be pretty close to the final outcome of June 2011 sales.

  • avatar

    Last week I was visiting a few friends who work at dealerships here in NE Ohio. Of the three I spoke with, all three said that May was pretty good, but that sales pretty much fell off of a cliff in June.

    • 0 avatar

      And I have been told by people in the new car retail business that this whole summer is expected to be slow going. All manufacturers are putting a lot of cash and other incentives on the hood to move the remaining unsold 2011 models, but many dealers fear they will face a glut of unsold 2011 model in the fall when the 2012 models will start to appear.

      Unless something drastic happens that will lift the confidence of the US consumers, like more jobs, a better economy and a better outlook for the future in America, the remainder of this year remains bleak. No one is going to buy a new car if they fear losing their job or their home, and all to many people are worried about exactly that.

      • 0 avatar

        highdesertcat –

        For ages now I’ve been listening to people prattle on (not you, just in general) about how “confidence” is required for the economy to function. While that may have been true to an extent in the past, I think that we are definitely entering a period where enough is enough: most of the people who need cars have them, and the cars they have are good enough, reliable enough, last long enough that they don’t need to swap out for new ones.

        The people buying right now are trading down, replacing that which is truly worn out or that which no longer fits their needs (think sportscar bachelor in a shotgun wedding scenario).

        I agree – I think that there is going to be a lot of inventory on lots come this August/September and some of the deals are about to get really, really good.

      • 0 avatar

        hreardon, you may very well be right. But I know that the class of 2011 at my nearby State university is very disappointed with the reality that most of them do not have a job waiting for them – not even a summer job — after graduation. Appears that there are a lot of young people in this same boat. Not to mention the 18 million other unemployed or underemployed waiting for their big break. Not conducive to buying a new car no matter how bad the old one is.

        I have brothers in the new car retail business and they tell me that foot traffic is down, depending on location. San Francisco and Los Angeles are the locations for their best sales, followed by Dallas and Houston. But Scottsdale, AZ and Huntsville, AL are not doing as well.

        They may get lookie-loo’s that talk a lot but during the conversation it quickly becomes clear that they are worried about any number of possible limitations that could befall them and they don’t/won’t/cannot commit. For a salesperson, that is a time-waster. Can’t make any money if you don’t sell.

        The clientele they deal with are mostly older, more established people, but the younger ones have more difficulty qualifying for financing for various reasons. One of the main factors appears to be that one of the income earners has recently lost their job, or they are too new on the job, or they missed a couple of mortgage payments, or their credit score just can’t pass muster.

        The dealerships still sell cars, just not in the numbers that would instill confidence in them that they will be better off during the second half of 2011, or the first half of 2012.

        And we haven’t even addressed the housing situation and the fact that so many people with ARMs will have to endure resets during the next 12 months even though they are already underwater, or upside down because of the drop in value of homes.

        I read a story of a guy and his wife who bought their new home in 2007 for $500K with an ARM. When it reset the first time the value had dropped to $475K and they were able to offset the difference by buying the equity with their savings which they were going to use toward the down payments on their new cars in 2008. But now their house is only worth $435K and their old cars are still worn out but their savings account is depleted. And when their ARM resets this time, they may have to walk away from their mortgage because they will not be able to make the payments with both their current incomes.

        That’s scary. Hopefully they’ll get to keep their jobs.

      • 0 avatar

        Cat, you’re right about students and recent grads. The job market isn’t good for them. But for many of them student loan debt is a major problem. It will hurt them and their buying ability for years to come.

      • 0 avatar

        highdesertcat –

        Great point about the recent college graduates. As for me, I have several younger relatives just leaving college now and guess where they’re going? Right back to mom and dad’s house because they cannot find work and they sure as hell aren’t going to be rushing out to buy a car anytime soon.

        The bigger problem, as you say, is student loan debt, and I think that the higher education bubble has all of the trappings of the next big thing to blow up: “education” is something everyone believes in, there is the belief that “everyone needs to go to college”, that “your income only goes up if you have a college degree” and that you cannot progress “without college”. Sound familiar to any other recent bubbles (*cough* internet *cough* housing *cough)?

        You get everyone on the same bandwagon believing in this and they’ll literally do anything, assume any liability and make any risky move necessary to join along.

      • 0 avatar

        Regarding the higher ed bubble. It’s real and at some point recently the amount of student loan debt outstanding passed credit card debr in size. It’s not dischargable in bankruptcy either.

      • 0 avatar

        We have to sell cars, preferably domestic brand cars, to help turn that failed US industry around. But with the insurmountable obstacles, like the economy, the price of gas and food, and the UAW again threatening strikes and bargaining for yet more pay and benefits, it becomes more difficult to do so.

        This would be where Obama and all his happy talk of Hope and Change is supposed to come in. We have not seen that yet and it is unlikely that whatever he chooses to do next is going to make much of a difference for the rest of us.

        There is no doubt that the only job Obama cares about is his own and that leaves millions of his unemployed supporters whistling Dixie.

        We’ve seen a slight uptick in sales for June over May but we have to do a whole lot better than that if we want to end this year with a higher SAAR. The forecasters are not all that bullish on what lies ahead but what really matters is how each one of us is doing in real life. Very few can say that they are better off now than they were 2, 4, 6, 8, 10, 12 years ago. If my wife wasn’t working I doubt very much that I would be able to buy a new car this year, next year, or at any foreseeable future time.

  • avatar

    Car sales won’t get traction as long as the US housing market is declining and under/unemployment remains high. The rest of us are at least psychologically affected by low consumer confidence.

    Predictions of ToyoHonda adding surcharges for tsunami-shorted cars are crazy, IMO, due to the depressed market. They need customers, not gouging.

    I think it’s cars like the Volt that will suffer the most, with a high price and ramping production plans but little market, and a slew of 40-mpg competitors.

    • 0 avatar

      Well believe it about the padding the MSRP. Civics go for +$3000 on average. Accords for $2200 over. Camry at full MSRP. Prius for a lot more IF they have any to sell. Sonata and Elantra remain very much in demand but there just aren’t enough of them to go around in the lower trims.

      • 0 avatar

        I’ll take your word on the price premium for those cars, but such premiums will only be paid by True Believers in those brands. The rest of us will look elsewhere, and this will have the natural effect of bringing down the prices of the ToyoHondas.

      • 0 avatar

        Neither would I pay a premium for any car, although I wanted a 2011 5.7 Tundra DC SR5 badly enough to pay full MSRP for it last January. Yeah, you’d have be a true believer to pay anything over full price, yet people do it all the time.

        If people want something badly enough, like, say, a Volt, to be first on the block, they’ll pay anything to get it. Likewise with old people who can have their social security checks pay the payments on their new car: at the Buick-GMC dealership portion of my brothers, a sixty-something couple walked in to LEASE a top-of-the-line Enclave with all the toys and AWD.

        The guy told the salesman, he didn’t care what it cost, he was going to lease it and let social security make the lease payments for him. But is an Enclave really worth nearly $50K? I don’t think so. A Lexus? Yes! A Mercedes or BMW? Absolutely, and more! But a Buick!? Never!

        GM may have come a long way under taxpayer ownership, but they haven’t come far enough to overcome their reputation and the curse of the UAW assembly skills.

  • avatar

    Actually, gslippy, I don’t think that recovering housing prices alone (don’t hold your breath…) will have too much impact on vehicle demand. I think that a lot of people used their homes as ATMs to support things like additional/more lavish vehicles than they otherwise could.

    Recent stats on HEW (home equity withdrawal) point that the number is growing increasingly negative and that equity which is being withdrawn is being used for things like basic living expenses, retirement, home maintenance (the only thing it really should be used for) and emergencies. Vacations and cars…not so much anymore.

    In fact, there are a few community banks here in NE Ohio that now only provide home equity loans/lines for home improvements, and the banks are requiring site visits to verify the work.

  • avatar
    Sgt Beavis

    I’m ready to buy an F-150 Lariat with an EcoBoost V6 but I’m waiting. The deals are gonna get better.

  • avatar

    Ah, yes, the magical consumers, just waiting on the sidelines with pent up demand.

    We’ve been hearing about those troublesome consumers waiting to buy houses, always ready to pounce 4-6 months after I make my prediction. Must be the same ones always in predictions with pockets full of cash just waiting to jump into the stock market 4-6 months out.

    Whenever we really really want people to buy things, and we can’t quantify how it can possibly happen, it’s very very hard to face up to tough reality. There’s no one waiting there. And the ones that are there either can’t afford it or can’t qualify for more debt.

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