After outstanding Memorial Day weekend sales, the auto industry’s estimates slid in the first few weeks of June, according to CNW Research. As of June 19, the research company’s monthly Retail Automotive Summary revealed that sales were on target to meet 1.25 million units, up 17 percent, projecting a true delivery rate of 13.7 million.
“Rather than portending a great sixth month, the Memorial Day weekend proved to be more ‘pull forward’ than a launching pad,” CNW’s Art Spinella said. “Closing ratios dropped by more than 4 percent compared to a year ago, even though floor traffic is up 24 percent. That combination is and will be responsible for the double-digit increase in total sales.”
June’s same store sales are up over 15 percent from last year, save major remodels and relocations, the report said. Although subprime approvals are 2.8 percent higher than a year ago, June’s numbers declined by 8.34 percent from May. “Dealers are willing, but in the past month many financial institutions have consciously limited their subprime portfolios. This will likely make swings up and down for the coming year,” Spinella said.
Veering from recent trends, trucks are now in shorter supply than cars, according to the monthly report. Used days’ supply modestly increased in the opening weeks of June as dealers better manage their abilities on what they can pay at wholesale vs. what consumers will pay for the vehicle.
“Inventory control has become a major issue because softer gasoline prices have made economy cars more of a drag on sales,” Spinella said. “The outlook for inventory control between cars and trucks will remain murky as long as a solid energy policy remains in limbo and the Mid-East continues to be trouble on the horizon.”