Data from the Bureau of Economic Analysis (BEA), shows that total light (cars and light truck/SUVs), vehicle sales in June were at an annual rate, of 16.810 million (M), units, down 182,000 units or 1.1% from May. On a three month moving average (3MMA), basis, sales were 17.003M, down 0.2% month on month (m/m) and off 2.7% year on year (y/y).

Figure 1 shows the history of car sales (domestic plus imports), from 2010 to present. June sales declined by 278,000 units or down 4.7%. Sales were down 11.9% 3MMA y/y and have been declining for 25 months on a 3MMA y/y metric.

In June, domestic car sales fell 232,000 units or -5.0%, m/m. On a 3MMA domestic car sales were down 7.9% y/y. Import sales dipped by 42,000 units or -3.1%, m/m. On a 3MMA import car sales were down 23.3% y/y. Import market share for cars stands at 23.0%, down 1.7% from the previous 12 month average.

Figure 2 shows light truck (domestic plus imports), sales history from 2010 to present.

Light truck sales were up 96,000 units or 0.9% m/m. Domestically produced light truck sales were up 187,000 units or 2.3% in June as imported light truck sales fell by 86,000 units or -3.6%. Import market share for light trucks stands at 20.8%, down 1.1% from the previous 12 month average.

Figure 3 charts import market-share of cars and light trucks from 2010 to present. Car market-share is trending down, falling from the mid-thirties in 2010 & 2011 to its current 23.3%. Light truck import market-share is showing just the opposite trend, rising from around 15% from 2010 through 2015 to its current 20.8%.

June sales figures for the major producers were as follows: GM, -4.7%, Ford, -5%, Fiat Chrysler, -7.4%, Toyota, +2.1%, Nissan +2%, Mazda, -14.7%, Subaru, +11.7%. June U.S light vehicle days’ supply was 74 days, up 8 days y/y.

Auto manufacturers are expected to use this year's retooling period to reduce bloated inventories. According to Wards, manufacturers have been reducing planned production for the third quarter with a notable decline in output planned for July. Motor vehicle and parts production will also be impacted, as will the broader manufacturing sector. There is a strong correlation (0.73), between seasonally adjusted changes in motor vehicle part production and total manufacturing output in July. This will play havoc with some of the near future macro-economic numbers like initial claims for unemployment insurance, hours worked. On a positive note consumer confidence and spending levels continue to be strong.

At Gerdau, we monitor production and sales of light, medium and heavy vehicles since they consume a tremendous amount of engineered steel. In addition, the health of the automotive industry offers an important gauge on the overall strength of the US economy.