The decline in U.S. auto sales may be less painful

The current slowdown in U.S. auto sales may be less severe for the auto industry than it seems. The reason is that most of the decline is in generally less-profitable fleet sales. The forecasting and consulting firms said they expect U.S. auto sales of just under 1.5 million in June 2017, down 2.3 percent from a year ago. That corresponds to a Seasonally Adjusted Annual Rate of 16.5 million, down from a SAAR of 16.8 million a year ago. The SAAR is an estimate for the full year of sales, based on the selling rate in a single month.

June would mark the fourth monthly SAAR in a row below the benchmark of 17 million units.Automakers are expected to report June sales on Monday, July 3. For the first half fleet sales would be down around 8 percent vs. the first half of 2016, while retail sales to individual customers would be down just 0.6 percent. Fleet sales, especially sales to daily rental companies, are generally less profitable than retail sales to individuals. Softer sales in June and for the first half of 2017 make it all but certain sales for the full year will fall below 2016, ending a record streak of seven years in a row of increasing U.S. auto sales. Read more