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July 6, 2012 – June's better-than-expected vehicle sales data suggest that the slowdown in the spring was partly weather-related, and NAFCU expects steady but modest growth for the remainder of the year.

Research firm AutoData Corp. reported that total vehicle sales in June increased from May's rate of 13.8 million units to 14.1 million units on a seasonally adjusted, annualized basis.

NAFCU Staff Economist Curt Long called the data "solid, but unspectacular." Though the numbers surpassed expectations, "it does nothing to quash fears of slowing economic growth," he said.

Car sales were up from 6.9 million units to 7 million units, annualized, while sales of light trucks increased from May's level of 6.9 million units to 7.1 million units on an annualized basis.

Over the past 12 months, sales were up 21.7 percent. Long said the year-over-year numbers reflect dramatic improvement since production was impacted by the Japanese tsunami in the spring of 2011.

All six of the largest automakers reported year-over-year sales increases in June. Toyota led the way with a 60.3 percent sales gain, followed by Honda (48.8 percent), Nissan (28.2 percent), Chrysler (20.3 percent), General Motors (15.5 percent) and Ford (7.1 percent).

The domestic manufacturers' share of the total vehicle market grew from 45.5 percent in May to 46.7 percent in June. The import share of sales from all manufacturers fell from 22.4 percent to 21.3 percent.

While June's data show that the vehicle sales market has yet to fully recover, the numbers also show that consumers are eager to replace aging vehicles and that auto makers are responding with higher incentives, Long said. "Even though consumer confidence has been on the wane in light of the debt crisis in Europe and a flagging labor market, the share of households looking to make a vehicle purchase in the next six months is up, according to the Conference Board."

Looking ahead, auto sales are expected to continue improving slowly in the second half of the year, but further deterioration in the labor market poses the greatest downside risk, the economist added.

For more, see NAFCU's Macro Data Flash (login required).