New car and truck sales in June are likely to be well off last month’s robust results, but analysts reportedly say business still should be sound despite only a modest rise in consumer incentives.
Two industry analysts, John Casesa of Merrill Lynch and Chris Ceraso of Credit Suisse First Boston , told The Associated Press (AP) on Thursday that they expect June car sales to be up about 2% from a year ago when major automakers report the closely watched results on July 1. A third analyst, Gary Lapidus of Goldman Sachs, reportedly predicts volume to be flat.
AP noted that, in May, overall US sales rose 3.4%, according to Autodata Corp., as skyrocketing petrol prices did little to dampen demand for pickups and sport utility vehicles – truck sales, which include SUVs and minivans, rose 4.7%, while passenger car sales were up 1.9%.
May’s seasonally adjusted annual sales rate, or SAAR, was a strong 17.84 million units, compared with 16.32 million in May 2003, AP added, while full-year sales for 2003 were 16.7 million.
In a research report, Casesa reportedly said he expects a selling rate of 16.7 million units for June, up from 16.5 million a year ago.
“Given May’s high 17.8 million SAAR, the modest drop-off we estimate for June is at very least neutral, if not positive relative to market expectations,” Casesa said, according to AP.
George Pipas, Ford’s top sales analyst, reportedly has cautioned industry observers from reading too much into month-to-month SAAR comparisons – he said a better gauge of the industry is to look at the selling rate over a period of several months.
For example, Pipas told AP, the six-month selling rate for December to May was 16.9 million units, in line with many forecasts for all of 2004.
“That’s a much better indication of the rate of travel in the US industry as it relates to new vehicle sales,” he told the Associated Press.
Ceraso reportedly said Detroit automakers are likely to underperform the market in June, while Asian automakers are expected to continue their gains.
Ceraso reportedly said a bright spot among the domestic automakers in June could be Chrysler, helped in large part by sales of its new 300C sedan and Dodge Durango SUV.
He told AP incentives, which played a large role in May’s results, likely moved up only modestly this month.
“Some new products are filtering into the mix (particularly at Chrysler), which should provide an offset to the seasonal tendency for incentives to rise into the end of the model year,” Ceraso told the Associated Press.