Senior Industry Analyst - Forecasting
Haig focuses on market analysis and future vehicle trends.
Latest From Haig Stoddard
Sales could reverse course next month, but making it a challenge is inventory is expected to decline 8.0% in July from June, as well as the high level of uncertainty how fast production can rebound in Q3 due to lingering risks with the flow of microchips.
The production cuts only exacerbate the inventory decline expected in July from June’s drastically depleted supply and further limits potential U.S. sales volumes in second-half 2021.
If not for the supply constraints, automakers would be breaking summertime production records across the board to get inventory back to levels needed to meet current demand.
Sales in July will be hardpressed to match June’s 15.4 million annualized level, and another sequential decline is in the cards for August, as new-vehicle availability continues to worsen before starting to improve in late-summer.
The deep drawdown in sales caused by disappearing inventory is expected to continue well into the summer before it starts to improve.
The trend throughout the year has been for the market to surprise on the high side vs. the levels implied by supply, but the relentless drain on inventory is pointing to more sequential weakness before growth resumes later this year.