With record amounts of cash flowing through the nation’s showrooms, sales of new vehicles have continued to boom during June, analysts report, putting the industry on track to post its best sales in more that a decade.
TrueCar Inc., the car buying service, expects retail auto sales to consumers will rise 7.9% in June compared with a year ago as robust demand, married with promotions by automakers, kicks off the summer-selling season. Total industry volume, including fleet deliveries, may increase by 6.3%.
New vehicle sales, including those to daily rental and commercial fleets, should rise to 1.5 million units this month from 1.4 million the highest since 2005.
Moreover, the seasonally adjusted annualized rate (SAAR) for total light vehicle sales should reach 17.4 million units in June, up 2.7% from last year’s 16.9 million-unit SAAR, TrueCar said in its analysis of June sales.
“The summer sales season is starting with a bang,” said Eric Lyman, TrueCar’s vice president of industry insights. “Consumers are in the market in force and we expect this momentum to continue into July and August, helped by manufacturer summer promotions. New entries to mass and premium small utility segments are driving growth, while Americans’ love for trucks and utilities remains steadfast.”
Lyman is not alone in his optimism.
“With another month of new-car sales growth in June 2015, the 16th in a row, the auto industry continues its incredibly strong momentum. With a 17.3 million projected SAAR for June, it would mark the third month above 17 million out of the past four months,” said Alec Gutierrez, senior analyst for Kelley Blue Book.
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Gutierrez said the expected 1.5 million vehicles sold this month will bring the first-half of 2015 totals to 8.53 million, a 4.7% increase from the same time last year and the highest first-half since 2005.
Second-quarter sales will come in at 4.58 million units, a 3.9% increase year-over-year, and also the highest second quarter total since 2005. In addition, total sales in 2015 are projected to hit 17.1 million units overall, a 3.6% year-over-year jump and the highest overall total since 2000, he said.
Kelley Blue Book also anticipates positive numbers from nearly all manufacturers in June 2015, but Fiat Chrysler Automobiles could see the largest year-over-year gains, said Gutierrez.
“The surge in popularity of utility and truck models this year has been beneficial for Fiat Chrysler’s Jeep and Ram brands, helping push the manufacturer to its highest U.S. market share since 2007,” he said.
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The average new-vehicle retail transaction price so far in June is $30,452, poised to achieve a new record for the month, according to the Power Information Network (PIN) from J.D. Power. The previous record was set in June 2014 when retail transaction prices averaged $29,813.
The combination of strong sales and high transaction prices has June on record pace for consumer spending on new vehicles for the month at approximately $35.6 billion, $2.5 billion more than the level achieved in June 2014. In the first half of 2015, consumers will have spent $206.2 billion on new vehicles, $11.6 billion more than the previous record set in 2014 when spending reached $194.7 billion.
In response to the significant boost from May’s sales volume, LMC Automotive is raising its total light-vehicle sales forecast for the year to 17.1 million units from 17 million units. The retail light-vehicle forecast remains 13.9 million units for the year, an increase of 3% from 2014.
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“Don’t let the lower year-over-year percent change fool you; this is arguably the strongest and healthiest the auto industry has been in a very long time,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “A green light outlook across a basket of metrics – including economic support, gas prices, the stock market, higher and stable transaction prices and significant product activity – is behind our forecast of a 17.1 million unit pace in the second half of 2015.”