Automakers are extending discounts, disappointed in June sales

Because of disappointing June sales, automakers are extending discounts while some are hiking rebates and enhancing loan terms on new cars and trucks.

Sales in June 2009 were very low but in June 2010, light vehicle sales increased by 14%. From May to June, the demand decreased, killing hopes for a rebound in the second half. Jessica Caldwell, senior analyst at Edmunds, an online shopping site, said that more generous incentives are expected in July. Caldwell estimated that the average per vehicle incentives in July will be at or above the $2,600 level in June. Analysts believe that for most brands, inventories increased from July 1 compared to June 1 but when compared to historical standards, they are still low. This is believed to be the reason why automakers are cautious when it comes to providing discounts. The Automotive News data center revealed that at the start of July, GM, Ford and Chrysler had enough vehicles in stock to last 60 days or less at current selling rates.