U.S. auto sales expected to continue their recovery in June: J.D. Power, LMC Automotive

FILE PHOTO: Automobiles are shown for sale at a car dealership in Carlsbad, California, U.S. May 2, 2016. REUTERS/Mike Blake/File Photo

(Reuters) - U.S. auto sales are expected to continue their recovery in June following a collapse in April, as coronavirus-led lockdown restrictions ease and buyers slowly return to the market, industry consultants J.D. Power and LMC Automotive said.

The consultancies estimate total U.S. vehicle sales to fall about 25% to about 1.09 million units in June, slowing from an over 40% plunge in April and a 29% decline in May.

“The industry continues to show signs of recovery in June,” the consultancies said in a statement on Friday.

“The combination of pent-up demand, states relaxing coronavirus-related restriction and elevated incentives are all providing a tailwind for the industry.”

Record levels of incentives by automakers are supporting the sales recovery, with incentive spending on pace to reach $4,411, the highest ever for June and an increase of $445 from a year earlier, J.D. Power and LMC Automotive said.

But inventory constraints amid the COVID-19 pandemic and any easing of the pent-up demand could hurt the overall pace of the sales recovery, said the consultancies.

Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel