New-Vehicle Retail Sales Ahead of Expectations
WESTLAKE VILLAGE, Calif. – This month’s new-vehicle sales rate is off to a strong start in 2013, with the highest retail selling rate in January in five years, reports J.D. Power and Associates.
Sales are projected to come in at 812,600 vehicles, which represents a seasonally adjusted annualized rate of 12.9 million units -- well ahead of the expected 12.4-million-unit annual level for 2013.
"The year is off to a fast start, which bodes well for the remainder of 2013," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, which released the monthly report. "Building on the momentum the industry has been gaining over the past two years, sales remain on a trajectory to return to pre-recession levels within the next few years."
Total light-vehicle sales for this month are projected to reach 1,027,700 units, an 8% increase from January 2012. Fleet share is expected to reach 21%, considerably lower than the 25% share in January 2012, signaling continued discipline in the industry-related rental car fleet sales.
Based on a strong finish in 2012 and a higher-than-expected pace to begin 2013, LMC Automotive, co-developer of the report, is increasing its 2013 U.S. forecast for total light-vehicle sales by 100,000 units to 15.1 million. In addition, the outlook for retail light-vehicle sales increases to 12.4 million units from 12.2 million units for 2013.
"The global industry is looking for the United States to offset risk in Europe and potentially slower growth in the emerging markets in 2013," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The good news is that the U.S. market is primed to overdeliver as the recovery heats up. The concern now is shifting from the continuing recovery to whether the automotive supply base will be able to keep up with hearty demand."
North America light-vehicle production was 15.4 million units in 2012, 18% higher than in 2011, marking the first time since 2007 that North American production surpassed 15.0 million units.
Vehicle inventory returned to an ideal level in early January of a 59-day supply, compared with 69 days in December. A strong sales pace in November and December 2012, coupled with the holiday production shutdown period in late 2012, drove inventory down to the current level. Overall, there are 3.1 million units or so available on dealer lots or in transit -- an increase of 600,000 units from last January.
LMC Automotive projects the 2013 North American production to be 15.9 million units in 2013, a 3% increase from 2012, with further upside potential contingent on the pace of demand in the first half of the year. For 2014, the North American production forecast is an increase to 16.6 million units. "With inventory in check and demand remaining strong, all indications suggest that production levels -- and automotive supplier profits -- will be at a high pace during 2013 for North America," Schuster said.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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