US auto sales to advance again in June

New light vehicle sales in June are expected to be assisted by
the month-end holiday boost

Signs of green shoots within the auto demand environment
continue to emerge as June US auto sales are expected to follow-up
on the solid volume levels of the preceding two months.

S&P Global Mobility projects new light vehicle sales volume
in June 2023 to reach 1.38 million units, up 17% year over year,
and representing the 11th consecutive month in which volume has
improved from the year-prior level. This volume would translate to
an estimated sales pace of 15.9 million units (seasonally adjusted
annual rate: SAAR), pressing the 16.0-million-unit level for the
second time in the quarter.

“For the second consecutive month, auto sales volumes will be
supported by month-end holiday programs,” said Chris Hopson,
principal analyst at S&P Global Mobility. “That automakers have
the ability to offer holiday clearance incentives is a positive
sign. It also indicates that some of the concerns regarding new
vehicle affordability, low inventories, macroeconomic uncertainty,
rising interest rates, and tighter credit conditions are not
causing retrenchment by consumers still in the market for a new
vehicle.”

According to S&P Global Mobility’s proprietary analysis of
advertised dealer inventory, June inventory levels remain
consistent with recent trend level of approximately 2.050 million
vehicles.

“New vehicle production support exists in the form of inventory
restocking,” said Joe Langley, associate director at S&P Global
Mobility. “However, there are signs that manufacturers are working
to preserve their strong pricing power at the expense of building
back inventory levels at an excessive pace.”

The estimated June sales result would move year to date 2023
sales volume to 7.7 million units, growth of over 12% from the
respective 2022 level. In addition, sales in the second quarter
would total approximately 4.1 million units, up approximately
581,000 units from the second quarter of 2022.

Mixed signals continue to prevail within the new vehicle demand
environment, and we do not expect sales volumes over the next
several months to dynamically change from the current trend.
S&P Global Mobility projects calendar year 2023 new vehicle
sales volume to reach 15.1 million units, growth of 9%, or an
incremental 1.2 million units, from the 2022 level.

Continued development of battery-electric vehicle (BEV) sales
remains a constant assumption for 2023 although some month-to-month
volatility is expected. BEV share is expected to reach 7.0% of June
sales, remaining on trend with the preceding months, pushing
year-to-date BEV sales growth to an estimated 46%. Looking at the
remainder of the year, beyond potential future pricing developments
by Tesla, a sustained churn of new and refreshed BEVs and
aggressive BEV production expectations will continue to promote BEV
sales as the year progresses.

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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• Source: http://www.spglobal.com/mobility/en/research-analysis/us-auto-sales-to-advance-again-in-june.html