Sales of new cars are expected to be off by nearly 6 percent from a year ago, according to a joint forecast by J.D. Power and LMC Automotive, the companies reported Monday (June 29).
Vehicle sales are projected to drop by 1 million units, a 5.7 percent decrease compared with J.D. Power’s pre-COVID-19 forecast and 11.3 percent lower than June of last year, the report revealed.
Total sales in June are projected to reach 1,085,600 units, a 25 percent decrease compared with June 2019. The seasonally-adjusted annualized rate for total sales is expected to be 12.8 million units, down 4.4 million units from a year ago, the report said.
“The industry continues to show signs of recovery in June,” Thomas King, president of the data and analytics division at J.D. Power, said in the news release. “This represents a significant improvement from May when retail sales were off 20 percent from the pre-virus forecast. The combination of pent-up demand, states relaxing coronavirus-related restriction and elevated incentives are all providing a tailwind for the industry.”
In the Detroit market, one of the most severely impacted by the coronavirus pandemic, retail sales are on pace to exceed 2019 levels, researchers reported.
Manufacturer incentives boosted June sales and are supporting the sales recovery, the report found.
The survey said transaction prices continue to set records and are on pace to rise by 4 percent to $34,981, the highest level ever for the month of June. These prices are being fueled by the consumer demand trend from cars to trucks and SUVs.
Car sales are on pace to account for just 24 percent of new-vehicle retail sales in June, the lowest level ever for the month and the third consecutive month sales fell below 25 percent, researchers found. As the industry shifts toward more expensive products, SUV sales are expected to reach a record 56 percent.
Record prices are helping to offset the decline in sales, with consumers expected to spend $35.1 billion on new vehicles in June, representing a decline of $4.5 billion from last year.
“Despite the challenges the industry continues to face, one notable positive for retailers is the strength of margins on new vehicle sales,” King said. “On average, total grosses inclusive of finance and insurance income on new vehicles are expected to reach the highest level ever in June.”