Report: Expect vehicle sales to rebound

By Karl Henkel

khenkel@vindy.com

LORDSTOWN

Vehicle sales, including compact-car sales, are expected to rebound in June, which could mean another big month for the Lordstown-built Chevrolet Cruze.

According to a J.D. Power and Associates report, June’s selling rate looks better than May’s, which dipped slightly after a torrid start to 2011.

Compact-car sales are expected to make up 17.6 percent of retail sales in June, up from 17.2 percent in May, when two models — the Cruze and Ford Focus — became the first two American-made cars to lead the compact-car category in five years.

The Cruze sold 22,711 units in May, slightly off its April pace, when it sold 25,160. The 2011 Cruze, no longer produced by the Lordstown plant, according to United Auto Workers Local 1112 President Jim Graham, will have sold more than 100,000 units since its October debut when official auto-sales figures are released Friday.

The 2012 Cruze is expected to hit dealerships sometime in July.

Part of the expected rise in compact-car sales could come courtesy of Honda and Toyota, normal category leaders that saw low inventory numbers in May due to the March 11 earthquake and tsunami in Japan.

Jeff Schuster, executive director of global forecasting, said in the report that declining gas prices and healthier inventory levels are some contributing factors to June’s expected success.

But Ivan Drury, an auto- market analyst at Edmunds.com, said that declining gas prices could impede compact-car sales.

“We’ve already seen that consumers, as far as their shopping habits go, are turning away from compact cars,” he said. “They’re kind of going back to the standard vehicle. The segment will still be hot, but it won’t be nearly as high as if gas was still around $4 a gallon.”

Drury said he expects the Cruze to remain in the compact-car category’s top three for June but estimated that overall sales might come in “slightly under” May’s figures.

Overall sales are expected to increase 8 percent compared with June 2010, including particularly good retail sales, which are expected to increase 14 percent.

J.D. Power used figures based on the first 16 selling days in June.

As for the rest of the year, J.D. Power modified its year-end estimates down from 13 million to 12.9 million.

“Provided that the economy decides to cooperate, the automotive summer slowdown will only be a speed bump, and a return of a measurable recovery pace is still expected in the second half of 2011,” Schuster said.