Automakers report 2Q vehicle sales today. Here's what investors should expect - CNBC

A Totota dealership is seen in Annapolis, Maryland on May 27, 2021, as many car dealerships across the country are running low on new vehicles as a computer chip shortage has caused production at many vehicle manufactures to nearly stop.

Jim Watson | AFP | Getty Images

DETROIT – Sales of new vehicles in the U.S. remain healthy but are showing signs of a slowdown amid concerns about inflation and a global shortage of semiconductor chips that continues to depress auto production and dealer inventory levels.

Analysts estimate automakers sold about 4.5 million vehicles in the U.S. in the second quarter — a 52% to 53% increase compared with a year ago when the coronavirus pandemic caused Americans to shelter-in-place and temporarily closed auto dealerships.  Most major automakers report June and second-quarter sales data on Thursday, except for Ford, which is expected to release its results Friday.

While the sales recovery from the depths of the coronavirus pandemic is impressive, the pace of sales this year is slowing. Deutsche Bank analyst Emmanuel Rosner expects June's sales pace to be 15.7 million vehicles, down from 17.1 million vehicle in May and 18.6 million vehicles in April.

The sales pace for any given month measures how many cars the industry would sell for the year if it sold the same amount every month. It's a main barometer of the industry's health and consumer demand.

"The sales slow-down likely reflects a lack of availability on dealer lots rather than a decline in consumer demand as automakers struggle to replenish dealer inventories with top models, particularly SUVs and pickup trucks," Rosner wrote in an investor note ahead of the release of the June and second-quarter sales data beginning Thursday.

Sales for every major automaker are expected to be up double digits during the second quarter compared to the same time a year ago, according auto research firms Cox Automotive and Edmunds. But they're only slightly above the second quarter of 2019.

Something not showing signs of slowing down is sales prices of new vehicles due to tight supplies from the global chip shortage and stronger-than-expected consumer demand throughout the coronavirus pandemic.

The average transaction price for a new vehicle in June is expected to reach a record $40,206, according to J.D. Power and LMC Automotive. The previous high for any month, $38,539, was set in May 2021, according to the companies.

The higher pricing has led to higher profits for automakers and retailers but has stoked broader concerns of inflation. Consumer spending on new vehicles is expected to reach a second quarter record of $149.7 billion, up 60.7% from 2020 and up 27.9% from 2019.

"Despite inventory shortages constraining the volume of vehicles sold to consumers, the underlying strength of consumer demand is clear. Consumers are buying more expensive vehicles despite smaller discounts, which is dramatically increasing the profitability of those sales for both manufacturers and retailers," said Thomas King, president of the data and analytics division at J.D. Power, in a statement.

– CNBC's Michael Bloom contributed to this report.

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Automakers report 2Q vehicle sales today. Here's what investors should expect - CNBC
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