October on Pace for Record Sales of New Vehicles
WESTLAKE VILLAGE, Calif. -- New-vehicle retail sales are expected to reach their highest level for October since 2004, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.
Retail sales of new vehciles are projected to come in at 1.1 million units, a 6% increase compared with October 2013.
The retail seasonally adjusted annualized rate in October is expected to be 13.6 million units, 700,000 units stronger than October 2013. Retail transactions are the most accurate measure of the underlying consumer demand for new vehicles. "The industry continues to demonstrate strong sales growth and robust transaction prices, resulting in another record-breaking month for industry consumer spending," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.
J.D. Power expects consumer spending on new vehicles to exceed $32.5 billion this month. In October 2013, consumer spending reached $30.7 billion.
In addition to a better economy, Humphrey said, growth in retail sales and higher transaction prices are in part the result of consumers increasingly taking out longer-term loans to achieve smaller monthly payments. Nearly one-third, 32.6%, of all vehicles sold this month were financed with a term of 72 months or longer, tying the record set in July.
Total light-vehicle sales are expected to reach 1.27 million units, a 6% increase from last October. Fleet volume is expected to be 203,000 units, or 16% of total light-vehicle sales.
Published by The Business Journal, Youngstown, Ohio.
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LMC Automotive is holding its 2014 U.S. light-vehicle retail sales forecast at 13.6 million units and total light-vehicle sales forecast at 16.4 million units. SUV sales have risen 12% this year compared to last year, while total new-vehicle sales have increased 5% for the same period. SUVs are projected to account for 34% of the light-vehicle market in 2014, up from 32% in 2013.
Following very strong sales in August that reduced inventory significntly, North American production in September was 3.3% higher than a year ago, resulting in an increase of over 1.4 million units from September 2013. With the increase in September, production in the third quarter was 4.1 million units, a 7.2% volume increase, compared with the third quarter of 2013 and the highest third-quarter total ever. Compact SUVs experienced the largest growth in volume, up more than 90,000 units, compared with the same period in 2013.
LMC Automotive's North American production forecast in 2014 remains at 16.8 million units, a 4% increase from 16.2 million units in 2013. North American production for 2015 is forecast to eclipse 17 million units, with capacity running at or above 90%.
Vehicle inventory at the end of September was at a 64-day supply, up from 56 days at the end of August.
Published by The Business Journal, Youngstown, Ohio.
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