The following is an excerpt from: Brad Tuttle | Juen 28, 2012 | Time.com |
At first glance, June 2012 appears to be shaping up as a fairly big month for auto sales. Industry experts estimate that 1.2 million new cars will be sold by the end of June, a rise of 18% compared to last June, and the most cars sold in the month since 2007. Even so, there are several reasons why automakers are worried.
Both TrueCar and Edmunds anticipate roughly 1.2 million new cars will be sold in the U.S. this month. Apparently this isn’t good enough, even though the figure represents a rise of 18% over sales last June.
How could an 18% increase in sales be a bad thing? Well, it’s bad if insiders and automakers were banking on much stronger sales—and there was good reason for them to do just that.
Last June, auto sales were especially weak because prices were high and dealers had limited supplies of vehicles, both of which came at least partially as a result of the devastating tsunami in Japan. For this June to be deemed a truly strong month for auto sales, units sold would have easily increased by more than 20%, as they did in February.
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