This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Reading the Tea Leaves on June Auto Sales

DETROIT ( TheStreet) -- The slowdown in auto sales that began in May is continuing into June, according to newly released sales analyses. But experts disagree on what June retail sales say about the economic outlook.

Based on retail sales for the first 17 days of the month, J.D. Power is suggesting that the outlook is improving, while Edmunds.com, analyzing data for the first 18 days, says the outlook is weakening. Retail auto sales are a key economic indicator because they reflect consumer willingness to make major purchases.

J.D. Power projects June retail sales of 994,800. That translates to a seasonally adjusted annualized rate of 11.9 million for retail sales, and an overall SAAR, including fleet sales, of 13.9 million, up from 13.7 million in May. In May, the SAAR slipped below 14 million for the first time this year.

"We're seeing healthy retail sales growth as we head into the summer selling season and as automakers change over to the 2013 model-year vehicles," said John Humphrey, J.D. Power senior vice president of global automotive operations, in a prepared statement. "Many major manufacturers are posting year-over-year retail sales gains this month, while maintaining strong new-vehicle prices." The firm said total sales are 16% ahead of June 2011.

Edmunds projects June retail sales will total around 993,000 units, which translates to a retail SAAR of 10.9 million vehicles and an overall SAAR of 13.4 million.

"Memorial Day weekend sales were disappointing, which resulted in a drop in the sales pacing for the last week of the month," wrote Jeremy Anwyl, Edmunds vice chairman, in a commentary. "This lower pacing has continued into June."

In terms of retail share for the top three automakers, Edmunds projects that Ford (F - Get Report) has gained about 3% over the same period in May, while GM (GM - Get Report) is down 4% and Toyota (TM - Get Report) is flat.

Toyota produced a 5% overall market gainin May.

For the full month, J.D.Power projects total light vehicle sales of 1.27 million, while Edmunds projects total light vehicle sales of 1.22 million.

Whatever the resolution, it is safe to say that the pace of auto sales has slowed from earlier in the year. In a report issued June 6, Standard & Poor's noted that the May SAAR of 13.7 was below its full-year 2012 assumption of 14.2 million. May was the first month this year that fell below an annual pace of 14 million.

"While we believe 2012 sales still are on track to improve over 2011, the levels seen in the first four months may prove to be peaks," said S&P analyst Robert Schulz, in a prepared statement. "What remains to be seen is whether this reflects caution by consumers contemplating big-ticket purchases, in light of the broader economy softening, or if it's merely a pause after the mild winter encouraged strong sales."

S&P said that: "Light-vehicle sales in the U.S., one of the consistent bright spots in the economy since the fall, dimmed a bit in May." It now appears that the lights will not turn brighter in June.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to http://twitter.com/tedreednc.

>To contact the writer of this article, click here: Ted Reed

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
F $15.05 0.20%
GM $33.23 0.00%
TM $134.12 1.30%
AAPL $125.54 0.81%
FB $86.20 0.47%

Markets

DOW 17,659.95 +63.60 0.36%
S&P 500 2,062.78 +5.14 0.25%
NASDAQ 4,975.9360 +17.4680 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs