June 2012 Car Sales: Fireworks Or Sparklers This July 4th?

July 3, 2012
Car sales were stronger at the major automakers in June, but the pre-July 4th fireworks could fizzle later this year.

Economic indicators are mixed, and analysts worry that June's solid numbers could weaken as unemployment and consumer confidence continue to weigh on the market.

For the month of June, automotive analysts at J.D. Power estimate the seasonally adjusted annual rate (SAAR) of retail new-vehicle sales at 11.9 million units, up nearly 300,000 units from the prior month. With fleet sales included, total vehicle sales are expected to reach a SAAR of 13.9 million units.

John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, says, "All indicators point toward an industry that continues to get healthy."

However, those numbers still reflect depressed demand after the 2008 financial crisis and recession, when the SAAR had held near 15 million units. The American car fleet is aging, which should be reflected in higher demand, but economic factors here and in Europe are overshadowing strong sales earlier this year, and casting a shadow on the second half of 2012.

In the U.S., unemployment for June is expected to remain level with May's 8.2 percent, and consumer-confidence numbers dropped in June for the fourth month in a row, even though home prices showed some signs of stabilizing in many markets, and gas prices remained relatively low. In Europe, the uncertain future of the Euro is impacting both GM and Ford; Ford expects to lose about $570 million in the second quarter on its European operations, while GM is contemplating yet another restructuring of its Opel unit.

Still, the upward trends in U.S. sales show promise. Jeff Schuster, senior vice president of forecasting at LMC Automotive, says that, "Despite a rising level of uncertainty with the economic recovery, consumers remain resilient in their willingness to purchase new vehicles."

LMC Automotive estimates the 2012 SAAR at 14.5 million units, a figure at the high end of the expectations of most automakers. Ford puts demand even higher, at 14.6 to 14.7 million units, with GM predicting between 14 and 14.5 million vehicle sales; Volkswagen estimates 13.9 million units for the 2012 calendar year.

Which companies are on the up side of sales this month--and which aren't? The totals for June 2012, as reported by the automakers:

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