JULY U.S. AUTO SALES DROP AS RECOVERY HEADWINDS GROW
Last week, the Cox Automotive July U.S. auto sales forecast was suggesting the market would see very little change from June’s results, as a lack of supply continues to batter the new-vehicle market. The team is expecting the July seasonally adjusted annual rate (SAAR) of new-vehicle sales to rise slightly to 13.2 million, up from last month’s 13.0 million pace but well below last year’s 14.7 million level. Volume is forecast to decline by approximately 13%.
We will have a full measure of July by the end of the week, but Cox Automotive Senior Economist Charlie Chesbrough notes, “July results will likely be yet another reminder of how the U.S. auto market has been transformed from just a few years ago, before the pandemic. Today’s auto market, running on a consistent 35 days’ supply, simply can’t support the volume so many of us took for granted. The old market, with 70-plus days’ supply, is a fading memory, and returning to near 17 million annual sales will likely take years. This new U.S. auto market is a lean operation, where monthly retail sales of approximately 1 million units is the norm. The challenge now? How to operate profitably in this new environment and be ready to move if and when the market grows.”