Auto Market Recovery Expected to be Slow

Washington DC June 29, 2010; The AIADA newsletter reported that CarMax CEO Tom Folliard expects the recovery of the worst U.S. auto sales market in decades to be slower than some others foresee.

According to USA Today, the head of the used-car dealership chain told shareholders at its annual meeting in Richmond that customers are starting to return and sales are improving, but not at pre-recession levels. Folliard’s analysis comes as automakers prepare to report June auto sales figures this week.

The Wall Street Journal reports that several analysts expect sales numbers to be lower than preferred. J.D. Power & Associates expects these to translate to a seasonally adjusted annual rate, or SAAR, of 10.9 million units.

The question is whether the U.S. consumer will switch into higher gear in the second half of the year, and many think that neither the labor nor housing markets look ready to support vehicle sales over the next six months. But eventually, vehicle sales will rise.

One analyst suggests to the Wall Street Journal that U.S. vehicle fleet turns over roughly every 13 years and that scrappage explains about 75 percent of demand for new vehicles, which bodes well for the coming years.

Click here for more from the Wall Street Journal on what to expect from the future auto market.

Click Here for more on CarMax CEO Tom Folliard’s take on the auto market.