Demand continues to be strong despite record average transaction prices and whispers of an impending recession, and some executives have said chip supplies could improve enough in the coming months to boost inventories in the fall and winter.
"The weakness in sales is not related to demand at all," Michelle Krebs, executive analyst at Cox Automotive, said in an interview. "We anticipate it will continue to be strong. The big question is whether the auto makers can produce at a level to satisfy that demand and boost sales."
Cox last month slashed its full-year outlook by nearly 1 million vehicles to 14.4 million.
For the most part, Krebs said, the rate of vehicle production hasn't changed much from late last year as auto makers and suppliers struggle to get parts. June marked the sixth consecutive month with output stuck between 1 million and 1.1 million vehicles, Cox said.
But auto makers have been affected differently.
Toyota has had to make especially steep production cuts, helping General Motors reclaim the U.S. sales crown in the second quarter. On the opposite side, Krebs said most Stellantis brands are roughly back to having pre-pandemic supply levels.
"Supply chain and production are wild cards," Krebs said. "There's such mixed signals about the chip shortage and production. We think things will improve in the second half, but we thought they'd improve in the first half."