July Car Sales Moving Up

It looks like car and truck sales are starting to bounce back after a weak June. But, it doesn't appear to be a trend just yet.

Estimates from J.D. Power and Associates, which survey car dealers, are that the annual sales rate will be in the 11.2 million range. That's up from June, but well below last July, when sales were inflated by the start of the "Cash for Clunkers" program.

"As the month progresses, we're seeing better and better results," says Jeff Schuster, executive director of global forecasting at J.D. Power. "The second week was stronger than the first. All in all, things are looking up."

Schuster told WWJ AutoBeat Reporter Jeff Gilbert that the sales in July may have been pushed by July 4th sales, and the perception that incentives are better in the summer. He said it's likely that sales will not stay at July levels.

"The overall recovery theme is still there," said Schuster. "Given this up and down motion, the roller-coaster that the sales pattern has been this year. That just suggests the recovery is going to be a little bit slower than we expected at the beginning of this year."

Power projects that sales will remain inconsistent for the rest of this year, with the rate of recovery slower than first thought. It could be two years or more before a "normal" sales rate of 15 to 16 million cars a year will be seen again.

"I think the trend is volatility. So, we're going to have tehse ups and downs."

The recovery can be seen in the increase in vehicle production. It was up 72 per cent in the first half of this year, because 2010 hasn't been affected by the extended plant shutdowns seen in 2009. But, J.D. Power analysts expect that to level off in the second half of the year, with production only up about 9 per cent from last year's levels.

The major automakers will release their July car sales figures on August 3rd.

Hear Jeff Gilbert's interview with J.D. Power's Jeff Schuster.