TrueCar (TRUE) Sees June New Vehicle Sales up 5.4%

TrueCar, Inc. (NASDAQ: TRUE) projects total new vehicle sales, including fleet deliveries, will reach 1,556,844 units in June, up 5.4 percent from a year ago, as consumers return to dealer lots this month after disappointing industrywide volume in May.

The seasonally adjusted annualized rate (SAAR) for total light vehicle sales in June is an estimated 17.2 million units, up from 17 million units a year ago. On a daily selling rate basis, overall sales may expand by 1.4 percent when adjusting for one additional sales day versus June 2015. Excluding sales to daily rental, commercial and government fleets, retail deliveries of new cars and light trucks will likely rise by 6.4 percent to 1,292,670 units.

“It’s clear that the industry shortfall in May was a case of demand deferred to June,” said Eric Lyman, TrueCar’s vice president of industry insights. “July should also get off to a good start as Independence Day weekend typically sees aggressive sales promotions. The fact that new car and truck deliveries, after six consecutive years of growth, continue to rise half-way to seven years underscores the strength of retail demand.”

Subaru may lead gains for the month with a 15 percent year-over-year rise in deliveries of its all-wheel-drive cars, wagons and crossovers, followed by Kia Motors with an 11 percent increase. FCA is estimated to rank third with a 9.7 percent increase for the month, followed by an 8.8 percent gain for Honda Motor, which is benefitting from demand for its revamped Civic compact car line.

Volume for non-luxury, mass-market brands will likely rise by 5.6 percent versus the year-ago month, and sales of luxury models may expand by 4.7 percent.

Incentive spending by automakers averaged an estimated $3,116 per vehicle in June, up 8.6 percent from a year ago, but down 0.9 percent from May 2016.

“There may be exceptions, but it’s reassuring that automakers as a group are keeping incentive spending within a reasonable range,” said Oliver Strauss, vice president of forecasting for TrueCar’s ALG unit. “The U.S. economic expansion has cooled, but we’re optimistic that it can reaccelerate in the second half of the year – particularly with regard to the labor market.”

The Federal Open Market Committee once again left interest rates unchanged this month, citing a softer jobs picture despite generally healthy U.S. economic conditions. May’s unemployment rate narrowed to 4.7 percent, the lowest for the month in nine years, though job growth fell far short of expectations. Gasoline prices remain favorable for consumers, averaging $2.325 per gallon nationwide as of June 21, according to AAA’s Daily Fuel Gauge Report, down from $2.792 a year ago.

Other key findings for June:

• Registration mix is expected to be 83 percent retail sales and 17 percent fleet versus 82.3 percent retail and 17.7 percent fleet last June.
• Total used auto sales, including franchise and independent dealerships and private-party transactions, may reach 3,244,080 units, up 5.5 percent from June 2015.
• Similarly, combined volume for new and used auto sales may reach 4,800,924 units, a 5.5 percent increase from June 2015.

Table 1: Forecasts for the 12 largest manufacturers by volume

Table 2: Total Market Share

Table 3: Retail Unit Sales

Table 4: Incentive Spending

Note: This forecast is based solely on TrueCar’s analysis of industry sales trends and conditions and is not a projection or reflection of the company’s operations.

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