June’s Auto Sales Suggest the Worst May Be Over
June car sales were bad - 28% lower than a year ago - but industry executives say they think the market has hit bottom and will continue to inch up as the year progresses.
It was the first month since September that sales have fallen less than 30%.
With the government's cash-for-clunkers rebate program set to begin sometime in July and signs that consumer confidence is starting to recover, it's possible the industry actually hit its low point in February.
June sales were at a 9.63 million annualized rate, meaning if sales every month were the same adjusted pace as in June, they'd total 9.63 million at the end of the year. In February, the annualized rate was 9.12 million.
"What we're seeing is stabilization," says Al Castignetti, vice president of Nissan sales for Nissan North America. "We're starting to see better traffic levels, better sales numbers, better quality of traffic, and we're starting to see the banks begin to loan money again a little more aggressively."
In a sea of losers, Ford was the strongest major automaker in June simply because its sales were down just 10.7%. Chrysler, which set off a fire sale earlier in the month when it forced 789 dealers to close their doors, posted a 41.9% decline. General Motors was down 33.4%, close to Toyota's decline of 31.9%.
Ford outsold Toyota for the third month and put Toyota behind its domestic competitor for the year. Still, Ford's Mustang was outsold by GM's Chevy Camaro: 9,320 for the Camaro compared with 7,362 for the Mustang. The newly relaunched Camaro sold twice as fast as GM was expecting, says Mark LaNeve, GM's vice president of sales, service and marketing.
Some had forecast that the market would top an annualized rate of 10 million in June, but LaNeve says he thinks the cash-for-clunkers bill just signed into law may have prompted some people to postpone car buying until the program starts up. It will give buyers who trade in an older, less-fuel-efficient vehicle up to $4,500 in rebates to buy a more-fuel-efficient model.
The bill "put some people on the sidelines in the last week of the month," LaNeve says. Sales "softened up the last week of the month, which is traditionally the week with the most sales."