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Cox Automotive Forecast: June Auto Sales to Slow Following Surprisingly Strong May

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Article Highlights

  1. Annual sales pace expected to reach a healthy 17.2 million level, but June volume will be lower.
  2. June sales volume forecast at 1.51 million units, down 2.7% from June 2018.
  3. The only certainty in June is uncertainty: Will fleet sales and leasing offset declines in retail sales?

ATLANTA, June 26, 2019 – Cox Automotive is forecasting June U.S. auto sales volume to decline nearly 2.7% from last year, about 40,000 units, falling to 1.51 million. The seasonally adjusted annual rate (SAAR) is expected to drop slightly to 17.2 million, below May’s 17.3 million level, but on par with the 17.2 million posted in June 2018. June is expected to return to a more modest market after surprisingly strong sales in May. The SAAR remains elevated because there are 26 selling days this June, one less than last year, so the pace adjusts higher even with lower sales.

Strong consumer confidence and employment gains continue to provide stable demand for light vehicles; however, affordability issues weigh on the market. In total, vehicle sales in the first half of 2019 are forecast to be down 2.2%, with June sales expected to follow this downward trend. Fleet sales, both commercial and rental, have been the key to supporting the new-vehicle market in the first half and are expected to finish the January-to-June period up nearly 7%. Consumer activity is weak: Total retail sales are down 4.5%, with purchases in the first half down over 5% and leases down nearly 3%, suggesting a shift toward more affordable payments offered through leasing.

Market Volatility Remains a Challenge
Volatility has been a key ingredient in the vehicle market in the first half of 2019, and predicting each month’s performance is increasingly challenging. A “W” shape is what the sales pace has looked like in the first five months, so anything is possible in June and will not be surprising. A harsh winter, tax reform uncertainty and tariff threats have all contributed to an unpredictable monthly sales pace so far. With the only certainty being uncertainty this month, some key questions for the market are: Does fleet activity continue at a high level? Does retail leasing remain elevated? Will retail sales continue the significant decline?

The largest variable this month, and likely throughout this year, is fleet volume. Sales of both commercial and rental fleet vehicles have been on the rise. One key contributing factor is likely tax law changes found in the 2017 tax reform package. Depreciation allowances for business-use vehicles increased significantly, and as a result, the market has seen more fleet activity and business-use vehicle purchases. This trend is likely to continue throughout 2019 and beyond.

June 2019 Sales Forecast Highlights

  • In June, new light-vehicle sales, including fleet, are forecast to reach 1.51 million units, down nearly 2.7%, or 40,000 units, from June 2018. However, versus May 2019’s strong performance, sales are expected to fall more than 5%, or nearly 80,000 vehicles.
  •  The SAAR in June 2019 is estimated to be 17.2 million, down slightly from last month’s surprisingly strong 17.3 million level and on par with last year’s 17.2 million pace. This June has 26 selling days, one less than last June, which is contributing to the relatively strong SAAR estimate given a decline in sales volume.
  • Record volume for June occurred in 2005 when sales reached 1.67 million vehicles and a SAAR of 18.0 million. The record occurred during the summer of “no haggle” incentive programs where employee pricing to all buyers was widespread. It is highly unlikely that new records will be reached this year.
    June 2019 Forecast

 June 2019 Forecast

Sales Forecast1 Market Share
  Jun-19 Jun-18 May-19 YOY% MOM% Jun-19 May-19 MOM
GM 242,000 255,000* 259,000* -5.2% -6.9%* 16.0% 16.3%* -0.3%*
Ford Motor Co 218,000 229,000* 231,000* -5.0% -5.9%* 14.4% 14.5%* -0.1%*
Toyota Motor Co 203,000 209,602 222,174 -3.1% -8.6% 13.4% 14.0% -0.5%
FCA Group 198,000 202,264 218,702 -2.1% -9.5% 13.1% 13.7% -0.6%
American Honda 145,000 146,563 145,532 -1.1% -0.4% 9.6% 9.1% 0.4%
Nissan NA 133,000 145,096 131,983 -8.3% 0.8% 8.8% 8.3% 0.5%
Hyundai Kia 125,000 120,623 128,496 3.6% -2.7% 8.3% 8.1% 0.2%
VW 55,000 53,304 59,604 3.2% -7.7% 3.6% 3.7% -0.1%
Subaru 62,000 59,841 63,972 3.6% -3.1% 4.1% 4.0% 0.1%
Grand Total2 1,512,000 1,553,200 1,592,253 -2.7% -5.0%      

1 June 2019 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements
2 Total includes brands not shown

* GM and Ford monthly sales are estimated

Sales Forecast1 Market Share
Segment Jun-19 Jun-18 May-19 YOY% MOM% Jun-19 May-19 MOM
Mid-Size Car 132,000 141,085 139,275 -6.4% -5.2% 8.7% 8.7% 0.0%
Compact Car 143,000 165,781 144,587 -13.7% -1.1% 9.5% 9.1% 0.4%
Compact SUV/Crossover 265,000 277,334 275,983 -4.4% -4.0% 17.5% 17.3% 0.2%
Full-Size Pickup Truck 220,000 217,609 231,240 1.1% -4.9% 14.6% 14.5% 0.0%
Mid-Size SUV/Crossover 233,000 223,067 255,310 4.5% -8.7% 15.4% 16.0% -0.6%
Grand Total2 1,512,000 1,553,200 1,592,253 -2.7% -5.0%      

1 Cox Automotive Industry Insights data
2 Total includes segments not shown

All percentages are based on raw volume, not daily selling rate.

About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning and using cars easier for everyone. The global company’s 34,000-plus team members and family of brands, including Autotrader®, Clutch Technologies, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com

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