U.S. Vehicle Sales (June 2021)

Andrew Hencic, Economist

Date Published: July 2, 2021

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U.S. Vehicle Sales Slow Again in June          

  • U.S vehicle sales fell 9.9% month-on-month (m/m) in June, falling to 15.4 million (SAAR) units (from 17.0 million in May). The consensus forecast was expecting a pull-back to 16.5 million, representing a significant underperformance. 
  • Unadjusted volumes totaled 1.30 million in June, 17.8% above year ago levels but 14.2% below June 2019.
  • Passenger vehicles (-10.8% m/m) saw a larger pullback than light trucks (-9.6% m/m). The light trucks segment accounted for 76.8 % of sales in June, down 1.0 percentage point from its share a year ago.  

Key Implications

  • After strong gains through the early spring, the pace of new vehicle sales has cooled considerably courtesy of ongoing supply shortages. June's report pulls down the 6-month moving average of sales to 17.0 million, still slightly ahead the pre-pandemic 16.9 million reading in February 2020. 
  • Strong demand for new cars as the economy re-opens has run up against supply challenges, producing historic price increases. Used vehicle prices continue to surge (+4.6% m/m in May, +48% y/y), while the most recent Consumer Price Index data show the price of new vehicles has jumped 1.6% m/m in May (the second largest monthly gain in 40 years). Moreover, these trends look to persist as inventory remains scarce. 
  • This month's sales report reflects the ongoing supply chain issues befuddling global manufacturers. Low inventories worsened in May (-24% m/m) indicating a healthy consumer appetite and an industry-wide problem getting product to market. Furthermore, despite production slowly starting to ramp up in June automakers will be playing catch-up for the rest of 2021 as robust demand will continue through the balance of the year.