Reading time ( words)
New-vehicle retail sales in January are expected to reach the highest levels for the month in a decade, both overall and on a seasonally adjusted annualized rate (SAAR) basis, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.
Retail Light-Vehicle Sales
New-vehicle retail sales in January 2015 are projected to reach 932,000 units, an 8.5 percent increase on a selling-day adjusted basis compared with January 2014 (January 2015 has one more selling day than January 2014). The retail SAAR in January is expected to be 13.9 million units, which is 1.0 million units stronger than January 2014, matching the levels reached in January 2004. Retail transactions are the most accurate measure of consumer demand for new vehicles.
"The year is off to a great start with exceptional growth in retail sales," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The sales momentum seen throughout 2014 is continuing into 2015 and, unlike last year, inclement weather has not slowed vehicle sales thus far. With an additional weekend in January this year, the industry is on a trajectory to post the second-largest year-over-year retail sales growth in the past 17 months."
Humphrey also mentioned that with the continuation of low gas prices, consumers are purchasing more trucks. So far in January, trucks, vans and SUVs account for 55.4 percent of sales, the highest level for a January since 2004.
Total Light-Vehicle Sales
Total light-vehicle sales in January 2015 are expected to reach 1.1 million units, an 8 percent increase, compared with January 2014. Fleet volume in January is projected to come in at 204,000 units, which, at 18 percent of total sales, is on par with the fleet percentage in January 2014.
Auto sales in 2014 ended strongly, with total light-vehicle sales finishing at 16.5 million and retail light-vehicle sales tallying 13.6 million.
LMC Automotive is maintaining its 2015 retail sales forecast at 14.0 million and its total light-vehicle sales forecast at 17.0 million.
"The auto industry is starting 2015 on auto pilot with January tracking as expected after a vigorous December," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Growth of 3 percent should be easy to achieve as the risk could be centered more with automakers and suppliers not being able to keep up with demand if growth were to be stronger than we project."
North American Production
Vehicle production in North America ended 2014 at 16.9 million units, a 5 percent increase from 2013. Significantly outpacing the annual increase, production in December was at 1.2 million units, 16 percent stronger than December 2013.
Given the strong pace of sales in December, however, inventory levels dropped to a 61-day supply at the beginning of 2015 from 71 days at the beginning of December.
Vehicle output in North America is expected to continue to increase in 2015, but with a slowing growth rate. LMC Automotive is maintaining the current forecast for North American production at 17.4 million for 2015, a 3 percent increase compared with 2014. Production in the first quarter of 2015 is projected to reach 4.3 million units, a 4 percent increase compared with the same period in 2014.
About J.D. Power
J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. Headquartered in Westlake Village, Calif., J.D. Power has offices in North/South America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit www.JDPower.com. J.D. Power is a business unit of McGraw Hill Financial.
About McGraw Hill Financial
McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL and J.D. Power. The Company has approximately 17,000 employees in 30 countries. Additional information is available at www.mhfi.com.
About LMC Automotive
LMC Automotive is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC's global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has locations in the United States, the UK, France, Germany, China Japan and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector. For more information please visit www.lmc-auto.com.