Cox Automotive was slightly more pessimistic in a forecast issued June 26, projecting a seasonally adjusted annual rate of 12.6 million. The company noted that while that’s 27 percent below the sales pace of a year ago, it’s up slightly from a 12.2 million rate in May this year.

Cox forecasted sales volume of about 1.1 million units in June, down 30 percent from June 2019. “While sales volume in the first half of 2020 is forecast to drop 24.2% compared to the same period in 2019, there are signs that auto sales continue to track in a positive direction,” Cox stated in a press release, although it cautioned a number of factors could still keep buyers away.

The association noted that retail vehicle sales recovered much faster than fleet sales from the impacts of the pandemic. Fleet sales were down year-over-year by a 72 percent margin in May, while retail sales were down only 17 percent. In June, fleet sales were down by 73 percent and retail sales by only 6 percent. Several major rental car companies canceled or significantly reduced their fleet orders, the association noted, causing such sales to fall sharply.

In addition, the association explained that dealers have experienced significant reductions in inventory compared to a year earlier, due to plant shutdowns and this robust recovery in retail demand. At the end of June, inventory was 2.6 million units, compared to 3.9 million units a year earlier.

“The auto market will have some major obstacles over the summer that will slow the V-shaped rebound we had all hoped for,” Cox Automotive Senior Economist Charlie Chesbrough said in a news release. “Available inventory is likely becoming a drag on sales, and some pull-ahead demand may have occurred in previous months as a result of all the aggressive 0% financing offers, particularly those directed at pickup buyers.”

The company noted the current crisis is unique for many reasons, compared to previous economic recession periods. “In previous recessions, demand falls while factories continue to operate, resulting in an over-supply of vehicles,” Cox stated. “This generally leads to large incentives from [original equipment manufacturers] in order to drive demand from lower prices. However, during this crisis, factories shut down at the same time that consumers pulled back.” This meant that as states started to open, buyers started coming back to the market more quickly than many had anticipated, the company explained, but factories have struggled to return to pre-COVID-19 levels.

According to Cox, the supply constraint will likely hold back the recovery pace through the summer or until factories, supply chains and dealerships can all get themselves back to normal when it comes to available inventory.