Article Highlights

1. ECONOMIC INDICATORS: Consumer prices for many goods and services are down. The overall Consumer Price Index (CPI) is up now only 1.6% YOY, and most of that gain is based on housing being up 3%. Substantial increases in vehicle prices may not be advisable while the overall CPI remains at or near the current level.
2. DEMAND: New vehicle retail sales were down 1% in June. Commercial fleet sales increased 15% while Rental and Government fleet sales fell 22% and 13% respectively.
3. SUPPLY: June new vehicle days supply was up 6 days from May (an increase of 7 days YOY), which continues to be high as new vehicle retail and fleet sales are marginally declining. Increased incentives and production cuts will help achieve a better inventory balance.