General Motors June sales drop 13 percent from May
Consumers are delaying big-ticket purchases because they're worried about their jobs in an environment of high unemployment. Analysts predict overall sales for the industry will drop 10 percent or more from May.
GM was the first automaker to report U.S. sales for June on Thursday.
There were glimmers of strength in GM's results. Sales for the automaker's four core brands — Chevrolet, Buick, GMC and Cadillac — rose 36 percent over June of last year, helped by strong demand for crossovers and some recovery in pickups.
The company's overall sales, which include brands being sold or phased out, increased 11 percent from a year earlier. Still, last June was a relatively weak month as GM headed into Chapter 11 bankruptcy protection.
GM is phasing out or selling Saab, Saturn, Pontiac and Hummer.
The industry sales drop from May could be good news for buyers later in the summer. Analysts say if the month-to-month declines continue, automakers will be tempted to expand sales promotions such as low-cost leases, zero-percent financing and cash rebates.
Weakness in new car and truck sales to individuals early in June accelerated in the second half of the month, according to data collected from 8,900 dealers nationwide by J.D. Power and Associates.
In the final week, J.D. Power reported that retail sales had dropped 5 percent compared with a year earlier. Sales to rental car companies and other fleet buyers were expected to be flat, indicating a weak June, the company said.
"Consumers are clearly hunkering down in light of the current environment, waiting for signs of a renewed recovery," said Jeff Schuster, executive director of global forecasting at J.D. Power.
Along with job worries, deals from Memorial Day and earlier in the year may have pulled customers out of the market for a new vehicle in June.
Demand for cars and trucks from businesses appeared more robust. GM reported that full-sized pickup truck sales rose 27 percent over June of last year, a sign that contractors are again looking to make investments.
The automaker also reported higher sales of its newer products such as the Chevrolet Equinox and Cadillac SRX crossover vehicles and the Buick LaCrosse luxury sedan. Sales of the Equinox and LaCrosse were up more than 170 percent over June of last year, while SRX sales rose more than 400 percent.
Job worries were reinforced Thursday when the Labor Department reported that new claims for jobless benefits jumped by 13,000 last week.
Claims have been stuck above 450,000 since the beginning of the year, raising concerns that jobs remain scarce as the economy recovers from the worst recession since the 1930s.