Auto Service World
News   July 4, 2016   by Steve Pawlett

U.S. Auto Sales May Not Set New High in 2016 After All: Forecasters




U.S. auto sales will grow nearly 5 % in June compared to a year earlier, but it looks as if 2016 may not break the annual sales mark reached last year, J.D. Power and LMC Automotive said on Friday.

“Risks continue to mount for the second half of 2016,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

After assuming a healthy rise to an annualized rate of 17.5 million vehicles in the second half of the year, up from 17.1 million for the first half, 2016 sales would be 0.3 % lower than last year’s record of 17.47 million vehicles, Schuster said.

Last year’s sales figure is from industry consultant Autodata Corp.

J.D. Power and LMC said total U.S. light vehicle sales for June would be 1.55 million, up nearly 5 % from last June. There is one extra selling day this June compared with a year ago.

Auto sales have steadily been rising since they tumbled to 10.4 million vehicles in 2009 during a recession.

Auto company stocks for major automakers have been Wall Street duds over the past several years as investors factored in an expected downturn in the cyclical auto industry. This, despite record earnings and profit margins by the two biggest sellers in the U.S. market, General Motors Co (GM.N) and Ford Motor Co (F.N).

“The key going forward will be to what degree automakers are able to adjust production levels to slowing demand rather than relying on profit-damaging incentives,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power.

While incentives reached a record high, so did the average transaction price for vehicles sold to consumers, which does not count the sales to government, businesses and rental agencies, Humphrey said.

The average incentive put on a vehicle to sell it more easily was $3,278, a new high for June, but the price at which they were sold also reached a new high for June at $31,089, J.D. Power said.

The average car price is rising in part because of consumer preference for bigger vehicles, pickup trucks and SUVs, as fuel prices remain moderately affordable.

On Thursday, forecast that U.S. sales will rise nearly 4% in June, but said annual sales were still on pace for a new record, as long as economic conditions remain solid, according to’s director of industry analysis, Jessica Caldwell.







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