Weakness in new-vehicle retail sales experienced during the first half of June has progressed at an accelerated rate through the remainder of the month, pulling the retail selling rate below 8.5 million units, according to J.D. Power and Associates.
Power had originally projected that new-vehicle retail sales were expected to come in at 768,000 units, which represents a seasonally adjusted annualized rate (SAAR) of just 8.6 million units. Final results from AutoData Corporation will be in late tomorrow.
The difference amounts to about half of the annual output of a typical final assembly plant, not counting the negative effects on production of component parts, such as engines and transmissions at supporting plants.
Thus, the Global Great Recession continues as the U.S. Congress grapples with a bill to regulate the reckless practices of Wall Street, which crippled the global economy in the fall of 2008. Republicans oppose the bill.
In the week leading up to the close of the month, June new-vehicle retail sales were down 5% compared with one year ago. As fleet sales are not expected to change significantly, the total seasonally adjusted annualized rate (SAAR) may come in well below the 10.9 million units previously predicted by Power.
“It appears that the volatility in the stock market and downbeat economic reports have caused a decrease in consumer confidence, leading to a self-fulfilling prophecy,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “Consumers are clearly hunkering down in light of the current environment, waiting for signs of a renewed recovery.”
As a result, June new vehicle sales in the U.S. will drop significantly from what was a weak month of May with a selling rate of 8.9 million units.
However, this remains above a selling rate of 8.2 million units in June 2009. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles, according to Power.