Light Vehicle SAAR Falls to 12-Month Low

JUNE SALES RATE FALLS TO 11.4 MILLION

PUBLIC DATA: U.S. Sales Summary Table

SUBSCRIBER DATA: U.S. Light Vehicle Sales – June 2011

U.S. light-vehicle sales totaled 1,049,220 in June - a slim 2.8% increase in daily sales that dropped the seasonally adjusted annual rate to a 12-month low of 11.4 million units. Analysts had looked for June sales to equal or better May’s 11.8 million unit SAAR.

Unlike May’s dip below trend, which was largely attributable to Japanese auto makers’ inventory shortages, June’s results seemed to indicate an industry-wide slowdown.

Daily sales for June (over 26 selling days, one more than year-ago) were down 8.5% from May (24 selling days), the biggest single-month DSR drop since January, and the biggest May-to-June drop since 2007.

June deliveries brought U.S. LV sales for the first half of 2011 to 6,310,655, 12.7% higher than like-2010.

General Motors underperformed the market as a whole in June, delivering 215,335 cars and light trucks - a 6.3% increase over year-ago DSR but a 10.1% decline from May – accounting for 20.5% of U.S. LV sales versus 20.9% in the prior month.

While Ford Motor Co. and Chrysler Group finished closer to previously forecast levels, sales shortfalls at other OEM’s ultimately raised the companies’ relative market shares. Ford sold 190,505 light vehicles, an 8.6% uptick versus year ago that equated to an 18.2% share of the market, the company’s highest take in nearly six years.

Chrysler Group sales accounted for 11.4% of sales, its highest market share since March 2009, even thought the company’s volume sales of 119,501 LVs was directly in line with expectations.

Collectively, the Detroit 3 DSR was up 10.9% over year-ago and down 7.6% from May.

Toyota sold 110,937 light vehicles in June, a 24.1% DSR drop from year-ago. The company, which saw its inventories fall to record lows in early June, could take solace in the fact that it sold more vehicles on a volume basis than it did in May and actually lifted its market share to 10.6% from 10.2% the prior month.

It also managed to hold back anticipated runs from Hyundai and Kia. The combined Korean auto makers threatened in May and June to best Toyota for the first time but failed to do so in either month.

Hyundai sales were up 11.2% over year-ago and Kia’s jumped 35.7%, but together they claimed 9.9% of U.S. sales in June compared to just below 10.2% in May. The companies are both struggling with their own inventory issues as they bump up against production capacity limits in North America for some of their most popular vehicles.

While production began to return to normal at Toyota’s North America production plants, Honda facilities are still working to return output to pre-earthquake levels. Honda delivered 83,892 vehicles in June, a 24.3% decline in DSR versus year-ago and a 14.7% drop from prior month. Honda accounted for just 8% of U.S. sales, the company’s lowest market share since July 2005.

Volkswagen's daily sales were up 29.9% for June, but also below expectations.

While May and June’s results were disappointing, it still may be too soon to draw conclusions about the market’s overall direction. With incentive spending down across the industry, the pressure on consumers to buy now has decreased in the second quarter, while low inventories have made effective cross-shopping harder.

With falling but still-high gas prices adding to a general sense of uncertainty in the market, buyers may simply be opting to defer purchases until the market situation stabilizes.