Analysts: Fleet Sales Mask Low Demand
Fleet sales are expected to once again prop up June car and truck sales when figures are released Thursday, masking weak demand among retail customers, reported The Detroit News.
Industry analysts believe June sales will outpace June 2009 as businesses and governments replenish their aging motor pools after delaying purchases amid the recession.
But overall sales are expected to fall from May, due to a volatile financial market and wary consumers.
Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, predicts this month's sales will total 971,000 cars and light trucks, up 13 percent from a dismal year-ago pace. That was the month that General Motors Corp. filed bankruptcy, and the auto industry was struggling with historically low sales.
"With the recovery not progressing as expected, it's gut-check time for the automotive industry," he said.
Schuster forecasts June's selling pace dipped to 10.9 million vehicles on an annualized basis, down from 11.5 million in May but up from 9.7 million a year ago.
Pricing firm TrueCar.com expects the seasonally adjusted annualized rate (SAAR) of sales will total 11.1 million vehicles. TrueCar.com forecasts June sales at 985,266, up 14.8 percent from a year earlier but down 10.5 percent from May. Edmunds.com, meanwhile, forecasts an 11.2 million SAAR and a 16.6 percent increase in June sales.
The boost from moribund 2009 levels is largely attributed to fleet orders by rental car companies, but that demand is expected to ebb later this year, putting increased importance on a resurgence in consumer demand.
Yet all automakers are better-positioned this year to benefit from a slow recovery in retail orders after cutting costs last year and, in the cases of GM and Chrysler Group LLC, receiving tens of billions in federal aid, according to a new report from Standard and Poor's.
Fleet sales are serving an important purpose for GM, in particular, which is loading rental cars with more options like DVD players and navigation systems, which are helping fetch higher prices and boosting resale values.
More Industry

Ownership Priorities are Shifting
A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.
Read More →
Pump Price Jump Calculated
ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.
Read More →
Black Book: Weekly Market Update
Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.
Read More →
Arkansas Auto Group Acquires First Indiana Rooftop
Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.
Read More →
Stellantis to Dive Into U.S. Lending
The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.
Read More →
New-Vehicle Prices Rise
With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.
Read More →
Black Book: Weekly Market Update
Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.
Read More →
Black Book: Weekly Market Update
Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.
Read More →
EU Auto Association Urges Action
Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.
Read More →
Driving into the Super CFC Era
Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.
Read More →