New Car Loans Likely To Say In Slow Lane
ARLINGTON, Va. – Despite an increase in new vehicle sales during July, CUs are being urged to not get their hopes too high that this is a sign auto lending will rebound early next year.
Curt Long, NAFCU research assistant, said the trade group is not forecasting any real measurable difference for auto sales in 2012, as some analysts have predicted [Credit Union Journal, June 13]. “We are still only looking at a modest recovery here,” Long said.
Total vehicle sales increased to 12.2 million annualized units in July, up from 11.5 million annualized units in June. “But these are still not numbers like we saw at the start of the year,” reminded Long.
Before the increase, what had caused some of the recent slowdown in new car sales, said Long, as well as a number of analysts in a previous Credit Union Journal report [June 13], is the slowdown in Japanese auto manufacturing due to the earthquake and tsunami that devastated that country. That lack of production has limited new car supplies and has driven up prices not only on Japanese vehicles, but on U.S. cars as well.
Long reported that Japanese auto production is expected to return to normal levels in September. What bodes well for credit unions is the fact manufacturer incentives, across all automakers, have been pulled back 15% from a year ago due to the limited supply, giving CUs a better chance to compete. “We expect the manufacturer incentives to come back at the start of the year,” added Long.