Robust June U.S. Car Sales Expected

Reuters is reporting that automakers are expected to report sizzling U.S. sales for June when they release results next week, boosted by a growing pile of cash, cheap loans and other incentives for consumers. Wall Street analysts see sales for the month running at a seasonally adjusted annual rate of about 16.9 million vehicles, matching last month's performance and just slightly behind the 17.1-million rate of June 2000. With the economy still in flux, much of the strength will come from the incentives automakers offer to lure customers into showrooms, now averaging more than $1,800 per vehicle.

Reuters also reported that A large chunk of the month's strength is thought to have come from a General Motors Corp. program offering some lessees early cancellations of their leases if they take a new GM vehicle instead. About 300,000 GM customers are eligible, and GM expects up to 25 percent to take the offer. Once again, foreign automakers are expected to improve their sales and market share in the United States. In May, GM. Ford and DaimlerChrysler AG held 63 percent of the market, compared with 65.6 percent last year and far below historical levels. "The threat from Japanese (automakers) becomes more evident every month and it appears it will only continue to grow," said Merrill Lynch analyst John Casesa.