US: Expect a sharp decline in total light vehicle sales in July - Nomura

Analysts at Nomura are expecting a sharp decline in total light vehicle sales in July to 16.8m saar from 17.4m in June for US.

Key Quotes

“The sales pace in June was unusually strong and we think that this pace is likely unsustainable. Rising household wealth and the strong labor market likely supported consumer demand, but credit conditions remain unfavorable.”

“According to the Federal Reserve’s Senior Loan Officer Opinion Survey, the lending standards on consumer auto loans have remained tight in recent quarters while demand for those loans has been soft.”

“Thus, we expect auto sales to slow in July. While monthly estimates of vehicle sales can be volatile, we expect 16.8m for total vehicle sales for 2018 following 17.2mn in 2017.”