Auto sales in U.S. down 10.8% in June from May

Sales in the U.S. fell 10.8% in June from May, falling below the expectations of several automakers and many industry analysts.

"We just don't see a lot of people going to purchase cars unless there is some big incentive or deal," said Jessica Caldwell, an analyst at auto information company Edmunds.com. "Most people's personal finances have not improved over the past year, so they are gun-shy about purchasing a car."

Jeff Schuster, global forecaster at J.D. Power & Associates, said consumers appeared beaten down by volatility in the stock market, downbeat economic reports and the slow pace of job creation, creating challenges for an auto industry trying to recover from one of its worst periods ever last year.

"With the recovery not progressing as expected, it's gut-check time for the automotive industry," Schuster said. "The industry's discipline will be put to the test even more in the coming months if a more pronounced recovery doesn't get underway."

Autodata Corp., which tracks sales statistics, said the annual selling pace barely topped 11 million. Most automakers and analysts have been projecting that the industry will sell 11.5 million to 12 million vehicles this year.

Although the numbers came in lower than what many expected, Brett Hoselton, an analyst with KeyBanc Capital Markets, said there were still prospects for resurging growth in the second half of the year.

The industry sold 983,738 vehicles last month, fewer than many were predicting but up 14.4% from the recession-depressed levels of June 2009.

Hoselton said there was still room for automakers to increase incentives, which "remain relatively low." Easier credit and little risk of another large automaker bankruptcy also should make for a more positive selling environment in the second half of the year.