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New-vehicle retail sales in June are expected to be down from a year ago, according to a joint forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,002,600 units, a 5.7% decrease compared with the J.D. Power pre-virus forecast and 11.3% decrease compared with June 2019. Reporting the same numbers without controlling for the number of selling days translates to a decrease of 14.7% over last year.
Total sales in June are projected to reach 1,085,600 units, a -25.1% decrease compared with June 2019. Reporting the same numbers without controlling for the number of selling days shows a decrease of 28% over last year. The seasonally adjusted annualized rate (SAAR) for total sales is expected to be 12.8 million units, down 4.4 million units from a year ago.
“The industry continues to show signs of recovery in June, with retail sales down only 6% compared with the J.D. Power pre-virus forecast,” claimed Thomas King, president of the data and analytics division at J.D. Power. This represents a significant improvement from May when retail sales were off -20% from the pre-virus forecast. The combination of pent-up demand, states relaxing coronavirus-related restriction and elevated incentives are all providing a tailwind for the industry.”
The sales came at a high price, though, Record levels of manufacturer incentives for the month of June are supporting the recovery. Incentive spending should reach $4,411 in June, the highest ever for the month and an increase of $445 from June 2019. Incentives on cars are expected to be up $459 to $4,031, with trucks/SUVs up $407 to $4,524.
Transaction prices continue to set records and are on pace to rise by 3.9% to $34,981, the highest level ever for the month of June. Record prices are being supported by the ongoing shift in consumer demand from cars to trucks/SUVs. Car sales likely will account for just 24% of new-vehicle retail sales in June, the lowest level ever for the month of June and the third month in a row below 25%. As the industry shifts towards more expensive products, SUV mix is expected to reach a record 56%.
Record prices are helping to offset the decline in sales, with consumers expected to spend $35.1 billion on new vehicles in June, representing a decline of $4.5 billion from last year.
Looking ahead, inventory constraints and any easing of the pent-up demand that is currently elevating sales will hinder the overall sales recovery.
“Despite the challenges the industry continues to face, one notable positive for retailers is the strength of margins on new vehicle sales,” King said. “On average, total grosses inclusive of finance and insurance income on new vehicles are expected to reach the highest level ever in June.”
Total gross per unit is on pace to reach $1,759, up $414 from last year. Strong per-unit grosses offer some mitigation to June’s sales pace, while also helping retailers maintain operations after experiencing massive business disruption in March, April and May.
US June Retail Sales Down -6% from Pre-Virus Forecast
Click to Enlarge.
New-vehicle retail sales in June are expected to be down from a year ago, according to a joint forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,002,600 units, a 5.7% decrease compared with the J.D. Power pre-virus forecast and 11.3% decrease compared with June 2019. Reporting the same numbers without controlling for the number of selling days translates to a decrease of 14.7% over last year.
Total sales in June are projected to reach 1,085,600 units, a -25.1% decrease compared with June 2019. Reporting the same numbers without controlling for the number of selling days shows a decrease of 28% over last year. The seasonally adjusted annualized rate (SAAR) for total sales is expected to be 12.8 million units, down 4.4 million units from a year ago.
“The industry continues to show signs of recovery in June, with retail sales down only 6% compared with the J.D. Power pre-virus forecast,” claimed Thomas King, president of the data and analytics division at J.D. Power. This represents a significant improvement from May when retail sales were off -20% from the pre-virus forecast. The combination of pent-up demand, states relaxing coronavirus-related restriction and elevated incentives are all providing a tailwind for the industry.”
The sales came at a high price, though, Record levels of manufacturer incentives for the month of June are supporting the recovery. Incentive spending should reach $4,411 in June, the highest ever for the month and an increase of $445 from June 2019. Incentives on cars are expected to be up $459 to $4,031, with trucks/SUVs up $407 to $4,524.
Transaction prices continue to set records and are on pace to rise by 3.9% to $34,981, the highest level ever for the month of June. Record prices are being supported by the ongoing shift in consumer demand from cars to trucks/SUVs. Car sales likely will account for just 24% of new-vehicle retail sales in June, the lowest level ever for the month of June and the third month in a row below 25%. As the industry shifts towards more expensive products, SUV mix is expected to reach a record 56%.
Record prices are helping to offset the decline in sales, with consumers expected to spend $35.1 billion on new vehicles in June, representing a decline of $4.5 billion from last year.
Looking ahead, inventory constraints and any easing of the pent-up demand that is currently elevating sales will hinder the overall sales recovery.
“Despite the challenges the industry continues to face, one notable positive for retailers is the strength of margins on new vehicle sales,” King said. “On average, total grosses inclusive of finance and insurance income on new vehicles are expected to reach the highest level ever in June.”
Total gross per unit is on pace to reach $1,759, up $414 from last year. Strong per-unit grosses offer some mitigation to June’s sales pace, while also helping retailers maintain operations after experiencing massive business disruption in March, April and May.