We have seen 2011 as a recovery year for the automotive industry, and with Seasonally Adjusted Annualized Rates (SAAR) over 13 million, it has seemed to come to fruition so far. However, early indications for May sales seem to be low enough to raise a few eyebrows. J.D. Power recently issued a report that estimates May’s auto sales could carry a SAAR as low as 11.9 million, a stark drop from the 13.2 million we saw just last month.
J.D. Power attributes the slowing pace in auto sales to high gasoline prices ($1.10 per gallon higher than just one year ago), lower sales incentives, and thinner inventories due to the aftermath of the Japan earthquake and auto parts supplier problems. The company also estimates that North American production could be cut by about 400,000 vehicles in the short term.
On the positive side, J.D. Power maintained its full-year outlook for U.S. auto sales at 13 million vehicles, indicating a second half of the year recovery from anticipated slow May auto sales numbers. Most industry analysts are in the 13 million neighborhood for 2011 auto sales.