U.S. June auto sales stalling and recovery in doubt

U.S. auto sales for June slipped from the pace of recent months, analysts say, raising doubts about whether the industry's recovery is faltering even before it delivers the second-half upturn automakers expected.

A Reuters poll of 41 analysts shows an average estimate of June auto sales at 11.4 million vehicles on a seasonally adjusted annualized basis, up from 9.7 million a year earlier.

The monthly sales results, viewed as one of the earliest snapshots of American consumer demand, underscore the still fragile state of the industry's recovery as consumers remain concerned about weak housing and employment markets.

The estimated June sales rate would mark a decline from 11.6 million vehicles in May and from the 11.5 million average sales rate over the prior three months.

"There is an increase on the horizon, but just how fast it increases and at what pace, I think, is debatable," GM North America President Mark Reuss told analysts on Wednesday.

"It's still a very delicate recovery. We feel a little bit of moderation and volatility going on in the market right now," Reuss said.

If June sales results are as weak as expected, that would leave the average rate for the first half of this year at just over 11 million units.

In that case, the industry would have to sell nearly 13 million vehicles at an annualized rate in the second half to arrive at the midpoint of Wall Street expectations.

Analysts and executives have projected 2010 U.S. sales of 11.5 million to 12.5 million units.

Leading industry forecasting firm J.D.Power and Associates said retail demand for new vehicles worsened near the end of the month, increasing the risk the June selling rate may come in well below 10.9 million units.

A drop in sales below the 10.9 million unit mark would represent the weakest tally for the industry since February 2010.