US Car Sales down 30% in June, recovery still off road

US car sales were down by 30% in June compared to prior year and SUV sales were down by 40%. At the top end of the market Porsche sales were down 66%.  There is no impact yet from the “cash for clunkers” programme and disruption from the Chrysler and General Motors re construction is taking toll.

Ford reported a drop in June sales of 10.7 per cent to 154,873 cars. It was the company’s smallest monthly sales decline since July 2008. Gaining market share in the process, Ford appears to be a beneficiary of turmoil in the market.

GM reported total sales of 176,571 were down 33.6 per cent compared with a year ago. GM’s fleet sales of 32,725 vehicles were down 49 per cent and truck sales in June of 93,458 were down 40 per cent.

Chrysler, in its first sales report following its sale to a group led by Fiat, said US June sales fell 42 per cent. Toyota recored a 32 per cent decline. Honda Motor sales fell almost 30%. Nissan reported U.S. sales fell 23%. Hyundai reported an 18% drop. Volkswagen sales fell 18%. BMW Sales were down 20.3% and Mercedes-Benz sales fell 22.6%. It was clearly a tough month.

Without a clear recovery in the car market, the US economy is continuing and will continue to struggle. There will be no recovery in world trade, down by 20% in the first four months of 2009 and little hope for a recovery in the UK economy and in Europe.

This week, Richard Lambert, CBI Director-General, outlined his concerns about the future of the UK economy at Politeia, the forum for social and economic thinking, in London. “The UK economy is undergoing a massive course of steroids,” he said. “The big question for policymakers is about how to generate sustainable growth once the impact of the medication starts to wear off.”

Policy hopes are based on three S’s, Stimulus, Sterling and the “Stock effect”. The concern is that once the fiscal and monetary stimulus expires, it is difficult to see the kicker to growth without a strong recovery in the international economy and world trade, no matter what the vagaries of Sterling. For now, US car sales are off the road and any recovery off the agenda.

UK Economics news and analysis : no politics, no dogma, no polemics, just facts.
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