U.S. Vehicle Sales (July 2019)

Vehicle sales soften in July

• Following two straight months of above-average figures, U.S. vehicle sales weakened to 16.8 million units (seasonally adjusted annualized rates) in July, broadly in line with market expectations of 16.9 million units.
• With today's release, Ford and General Motors announced they will only report U.S. sales quarterly, so monthly sales by manufacturer are more limited.
• In terms of other top selling brands, Honda and Toyota reported an increase in vehicle sales relative to a year ago (Honda:1.9%, Toyota:0.2%), while Nissan observed a decline (-9.1%).

Key Implications

• The solid showings in May and June were never really here to stay were they? With little pent up demand and competitive used car market, vehicle sales edged lower in July. The strength in May and June were a bit of a reprieve from the gravitational pull from these longer-term forces.
• We expect the healthy American consumer – supported by a strong labor market, rising wages, and lower interest rates – to ease the decline in auto sales but not reverse it. Over the remainder of the year, we anticipate the level of auto sales to remain in the 16.5 to 17.0 million (SAAR) units per month range.

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