Light vehicle sales totaled 13.0 million in June, up from 12.7 million in May. The June result was up 2.3 percent from the previous month but was the thirteenth month drawn below the 16 to 18 million range, averaging only 13.6 million during that time (see first chart). Poor auto sales are mainly due to material shortages whose production is limited, resulting in reduced inventory and rising prices.
Domestic vehicle sales rose 10.3 million units, up 0.8 percent from 10.2 million in May, while imports rose 2.72 million, up 8.1 percent from 2.51 million in May, according to assembly sources. Domestic sales were typically between 13 million and 14 million in the pre-epidemic period, averaging 13.3 million in the six years from December 2019. Domestic shares rose 79.1 percent in June vs. 80.2 percent in May.
Domestic rallies declined in May, reaching 10.19 million at a seasonally consistent annual rate. This is 1.3 percent lower than the 10.33 million in April and below the 10.8 million average for three years from December 2019 (see second chart).
The shortage of components, especially computer chips, continues to limit production for most manufacturers, creating a shortage for many models, resulting in low inventory and high prices. Ward’s unit auto inventory estimates came in at 103,900 in May, down from 110,500 in April and still the all-time low (see chart 3). Inventory could be stable as the average was 109,678 in the last nine months and did not fall below 100,000. The Bureau of Economic Analysis estimates that the inventory-to-sales ratio rose to 0.530 in May, from 0.440 in April, and the highest level since September (see Chart 3).
Low inventory levels have pushed prices sharply over the past two years, with average consumer spending for a car coming to $ 33,947 in May, a new record high of 1.8 percent since April (see fourth chart). The average consumer spending on a light truck rose to $ 49,632 from $ 48,459 in April, up 2.4 percent for the month and a new record high (see fourth chart).
As part of disposable personal income per capita, the average consumer spending on a car fell to 61.2 percent from 60.4 percent in April and increased sharply from 51.8 percent in December 2019. The average consumer spending on a light truck as part of disposable personal income was 89.4 percent vs. 87.7 percent per capita in April and 78.8 percent in December 2019 (see Fourth Chart). Both systems are equal to 2014 percent.