Cars and Drivers

GM June Sales Fall Sharply -- a Recall Problem?

Chevrolet-Impala
Source: courtesy of General Motors
Carmakers are scheduled to announce June sales on Tuesday, and we thought we’d give you a preview of what some of the auto industry research and information firms believe will happen. In May, the seasonally adjusted annual rate (SAAR) of sales came in at 16.8 million, its highest reading since July 2006.

Industry research firm Edmunds expects the June SAAR to drop 15.4% to 16.3 million. Truecar expects the SAAR for June to fall to 16.4 million, and Kelley Blue Book (KBB) is forecasting a June SAAR of 16.3 million. June had fewer sales days than either May 2014 or June 2013, accounting for some of the decline.

One thing all three auto industry watchers agree on is that sales at General Motors Co. (NYSE: GM) will be lower in June than in May and lower than June a year ago. Edmunds forecasts GM sales down 14.9% in June to 242,200 units, compared with 284,694 in May. Truecar expects GM sales to reach just 257,000, and KBB is looking for sales of 255,000.

None of the forecasts for GM is heartening. According to Truecar, GM cut its sale incentives by nearly 12% year-over-year in June. And while the negative impact from GM’s millions of recalls has not previously affected demand, it could be that as the company looks for ways to offset the money that is going to pour out to fix the recalled vehicles and to pay for litigation, incentives do not keep pace with GM’s competitors. GM took a $1.3 billion charge in the first quarter for recall-related expenses and expects to take another $700 million charge in the second quarter.

ALSO READ: Ford, Toyota and Honda Top Best Global Green Brands

Ford Motor Co. (NYSE: F) is expected to sell 219,601 units in June, according to Edmunds, roughly the same number as Truecar projects. That is down more than 13% from May sales and about 6.5% from June 2013 sales. KBB forecasts sales of 218,000, or down 7.2%. Ford boosted its sales incentives by 9.3% year-over-year in June, according to Truecar.

Edmunds forecasts that Chrysler Group sold 166,483 units in June, up 6.3% year-over-year, but down 14.4% from May. Truecar forecast sales of 170,000, and KBB’s forecast calls for sales of 160,000. Chrysler increased its incentive spending by 9.8% year-over-year in June.

Toyota Motor Corp. (NYSE: TM) is expected to report sales of 197,808 units, according to Edmunds, and 208,000 according to Truecar. That is up 1.3% and 6.5% year-over-year, respectively. KBB forecasts Toyota’s unit sales to drop 0.6% to 194,000 units. Toyota raised incentive spending 2.6% year-over-year in June.

Honda Motor Co. Ltd. (NYSE: HMC) will report a sales decline of 7.4%, according to Edmunds, and a sales increase of 0.1%, according to Truecar. KBB forecasts Honda’s U.S. sales to fall 7.2%. Honda sold about 137,000 units in June 2013. Incentive spending at Honda rose nearly 10% year-over-year in June.

ALSO READ: Volkswagen Sales to Plunge 16% in June

Once again, the big loser in terms of sales is Volkswagen, which is forecast by Edmunds to see a sales decline of nearly 16%, from about 51,000 units in June 2013 to about 43,000 units this year. KBB has sales falling from around 54,000 units a year ago to 48,000 this year, a drop of nearly 12%. Volkswagen raised is incentive spending by 14.7%, according to KBB.

All three research firms keep GM in the top spot as measured by market share, although the percentages are slightly different. The top five by market share as measured by Edmunds are GM (17.8%), Ford (16.2%), Toyota (14.6%), Chrysler (12.3%) and Honda (9.3%). According to Edmunds, VW trails the field with 3.1% market share.

ALSO READ: Ten Cars Americans Don’t Want to Buy

Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)

Take the quiz below to get matched with a financial advisor today.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Take the retirement quiz right here.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.