Macro Flash Report

Auto Sector

Takeaway:

The increase in auto sales indicates that activity is recovering, while elevated interest rates have kept this sector under pressure. Given the confidence the market now has in a September interest rate cut, we anticipate that the recovery will continue and there will be more normal levels of activity for sales, production and inventories by the end of this year.

Wards Total Vehicle Sales

Wards Total Vehicle Sales jumped to 15.82m in July from June’s downturn to 15.29m. Despite this rebound, sales figures still fell short of the forecasted 16.20m sales and were unable to breach 16m at any point this year.

Auto Inventories & Production

In June, Auto Production declined slightly to 134.2 from 135.4, suggesting some stabilization after the more significant drop observed in April. At the same time, Auto Inventories inched up to 231.78 in June from May’s level of 230.35, marking the end of three consecutive months of declines, also suggesting some stabilization.

Looking forward, the primary roadblock for a true rebound in activity has been affordability. While there is a lot of noise and volatility in financial markets over the last few days, one thing is clear – the interest rate cutting cycle is going to begin in September.