Industry In Line for Milder Sales Uptick in June

Your mileage will vary, automakers. As consumer confidence increases to some degree — a phenomenon partially dependent on what the novel coronavirus is doing in various regions — auto sales are expected to follow.

Forecasters now claim U.S. auto sales will see a marked uptick in June that pales next to the jump seen in May.

According to J.D. Power and LMC Automotive, June auto sales in the U.S. should come in about 25 percent below pre-virus forecasts, representing 1.09 million sales. In comparison, May sales were 29 percent lower than levels predicted at the dawn of the New Year That Wasn’t, Reuters reports.

A four-percent increase is a move in the right direction, but nothing like the 11-percent increase seen in May. That month’s decline (vs pre-virus forecast) represented a significant improvement over April’s 40-percent decline.

“The combination of pent-up demand, states relaxing coronavirus-related restriction and elevated incentives are all providing a tailwind for the industry,” the two firms said in a statement.

Complicating the sales picture is a worsening viral situation in certain markets that largely side-stepped the initial wave of COVID-19 infections in the spring. Those markets include Arizona and Texas. California and Florida are also on the upswing, though in this phase, dealers at least remain open.

Sweetening the pot is a trend seen in spades during the Lockdown Era: big, juicy incentives. June discounts are forecast to amount to $4,411 per vehicle, on average, which would be a new June spiff record. That’s a per-vehicle increase of $445.

Virus aside, another factor that could very easily hamstring automakers in June is diminished inventories born of this spring’s production halt. While less of a concern for OEMs whose imported vehicles piled up in U.S. ports, unloved and unwanted by their dealer network, during the lockdown, purveyors of hot-selling people movers (read: domestic trucks, SUVs) are playing catch-up after putting the pedal down at various assembly plants.

[Image: Ford]