Auto industry’s momentum expected to continue in June

By Kalea Hall | June 30, 2015 at 12:05a.m.

YOUNGSTOWN

U.S. auto sales in May of more than 1.6 million made for the best May sales on record.

With one more sales day, June’s sales are expected to follow close behind with expectations of more than 1.5 million sales – about a 6 percent increase from last June.

Automakers will post their actual sales Wednesday.

“For the last five years, the auto industry has outpaced the economy in terms of the recovery from the last recession,” said Tim Fleming, Kelley Blue Book analyst.

KBB analysts expect to see sales of 1.5 million units for a 5.8 percent increase over last June. General Motors is expected to have a 6.2 percent year-over-year growth.

The projection for all U.S. auto sales will bring the first half of 2015 to 8.53 million – a nearly 5 percent increase from sales this time last year. And it would mean the highest first half of the year since 2005.

Factors leading to the increase in sales outside of consumer confidence include readily available credit and low interest rates.

“This summer we will see a consistent pace [of sales],” Fleming said.

KBB analysts expect all automakers to see an increase in sales year over year in June.

All segments are expected to post positive growth with the compact utility/crossover vehicles leading with an anticipated 18.8 percent growth, and the compact-car segment with a 3.9 percent increase.

Larger vehicles are still on trend for June. In fact, TrueCar analysts expect the compact-utility segment to surpass compact and midsize segments to become the No. 1 segment this year. This would be the first time a utility vehicle has been No. 1.

TrueCar analysts estimate June sales will come in at 1.51 million compared with the 1.42 million sales last June. Retail sales are expected to rise 7.9 percent.

“We are still seeing all fundamentals of the business are strong,” said Eric Lyman, vice president for industry insights at TrueCar. “We have really seen the automotive industry leading the charge in the economic recovery. It is such a powerful force behind the U.S. economy.”

PNC Economist Mekael Teshome agreed. The auto industry was one of the first industries to start turning the economy around.

The industry provided “key support” for the economic recovery. The momentum the industry has going is a reflection of the favorable conditions for consumers.

“We have a lot of things working in our favor,” Teshome said. “We have more people working, some income growth, lending is improving, interest rates are low and that helps to make cars affordable.”

Local auto dealers expect to post better sales this June over last.

“We will finish out the month strong,” said Nick Siciliano, general manager of The Honda Store on U.S. Route 224. “We are really excited about the new Honda Pilot and HR-V.”

Lordstown-built Chevrolet Cruze sales have bounced back up this month at Greenwood Chevrolet in Austintown.

“The Equinox is on fire,” said Greg Greenwood. “It seems to be a niche that people are really thrilled about.”