Commerce

Engine Sputters For June Car Sales

The engine is sputtering for U.S. auto sales.

The latest data, as noted by news in The Wall Street Journal, shows that June marked another slowdown, as notched by auto maker juggernauts such as GM and Ford, with declines seen year over year. The declines also were the hallmarks of car rental companies such as Hertz and Enterprise Rent-A-Car.

Sales to retail customers were down in June to the tune of 1 percent through the first six months of the year, while the car rental business saw declines of roughly 8 percent over the same period, as measured in volume and as reported by JD Power.

The rental agencies are among the biggest customers of the auto firms, noted the Journal, which also reported that the calculated shift away from the rental business has been one focused on profits. The need is there, as demand across the auto industry (not just in individual end markets or vehicle classes) has slipped by the low single digit percentages.

This latter move was spurred by consumer tastes eschewing sedans and SUVs.  Price remains a factor, as Edmunds.com reported that the average monthly payment on U.S. vehicles has come to $500, and loans are at a record 69-month tenure.

The rental car slippage may herald something a bit different in the auto industry. The Journal stated that in a research note penned by R.W. Baird analyst David Leiker, such a decline in auto sales is “not something normally seen” at the beginning of what would be considered a cyclical downturn.

Looking at overall vehicle tallies, GM sales were off 5 percent to more than 243,000 vehicles during the month of June, while Ford also slipped the same percentage to nearly 228,000 vehicles. By way of contrast, Japanese auto makers, such as Honda Motor, saw slight low single digit volume increases.

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