The U.S. auto industry is witnessing a slowdown with a decline in sales over the first six months of the year. Higher vehicle price and competition from the off-lease vehicles have been the major culprits, dampening demand for newer vehicles (read: 5 ETF Strategies to Win in a Pricey Market).Of the six major American and Japanese automakers, Nissan Motor NSANY stood at the bottom of the table, registering an 8.2% decrease in sales during the first half followed by the declines of 7% for General Motors GM, 3.1% for Toyota Motor TM, 2% for Fiat Chrysler FCAU, 1.6% for Ford Motor F and 1.4% for Honda Motors HMC.Though there is no sign of deceleration for pickups and SUVs, the hottest segment in the industry — compact crossovers sales — cooled off this year. Passenger car sales also suffered a persistent downside for long. Per Bank of America Merrill Lynch, the U.S. auto industry is hurtling toward recording a nearly 30% drop in sales by 2022.However, a growing economy albeit at a sluggish pace and higher consumer confidence will likely fuel auto demand in the second half of the year. Additionally, a strong labor market would encourage consumers to buy more vehicles. A boost in the housing sales and lower lending rates will also drive demand for new vehicles. Further, if the Fed cut interest rates this year as it already signaled to, then it will push more consumers to avail of loans while buying homes. The combination of these factors bodes well for the industry and investors could tap the opportune moment at a cheap price (read: ETF Strategies to Follow If Fed Cuts Rate).This is especially true as the auto sector has a compelling valuation with a P/E ratio of 10.20, the lowest of all the 16 Zacks sectors. This could lead to an upside in auto stocks this year. That said, we have highlighted the pure play auto ETF & a few stocks that could be attractive picks:First Trust NASDAQ Global Auto ETF CARZThis fund offers a pure play global exposure to 34 auto stocks by tracking the NASDAQ OMX Global Auto Index. It is moderately concentrated on the firms in its basket with each making up for no more than 9% share. CARZ has a lower level of $18.3 million in AUM and trades in a small average daily trading volume of about 4,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.Cummins Inc. CMIBased in Columbus, IN, Cummins designs, manufactures, distributes and services diesel and natural gas engines as well as powertrain-related component products worldwide. The stock has seen a solid earnings estimate revision of 82 cents for the current year over the past 90 days and has an expected earnings growth rate of 23.05%. It has a Zacks Rank #2 (Buy) and a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.PACCAR Inc. PCARBased in Bellevue, WA, PACCAR is a global technology company that designs and manufactures premium quality light, medium and heavy duty commercial vehicles sold worldwide under the Kenworth, Peterbilt and DAF nameplates. The stock saw a positive earnings estimate revision of 31 cents over the past three months for the ongoing year with an estimated earnings growth rate of 7.85%. It has a Zacks Rank of 2 and a top VGM Score of A (read: ETF & Stock Winners of Longest US Economic Expansion).Ferrari N.V. RACEBased in Maranello, Italy, Ferrari is engaged in designing, manufacturing and selling sports cars. The stock has seen a positive earnings estimate revision of 7 cents for this year over the past 90 days and has an expected earnings growth rate of 2.49%. The company is a Zacks #2 Ranked player and has a VGM Score of B.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Motors Company (GM): Free Stock Analysis Report Ford Motor Company (F): Free Stock Analysis Report PACCAR Inc. (PCAR): Free Stock Analysis Report Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report Nissan Motor Co. (NSANY): Free Stock Analysis Report Toyota Motor Corporation (TM): Free Stock Analysis Report Ferrari N.V. (RACE): Free Stock Analysis Report Cummins Inc. (CMI): Free Stock Analysis Report First Trust NASDAQ Global Auto Index Fund (CARZ): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report