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East Coast Snowzilla Doesn't Stop Car Buyers in January

East Coast Snowzilla Doesn't Stop Car Buyers in January

By Philly Murtha, January 28, 2016
Despite last weekend’s winter storm Jonas that produced record snowfalls of more than 2 feet in Washington, D.C, Philadelphia, and Baltimore, consumers continued to purchase or lease new vehicles at a record pace, according to a January sales forecast update from J.D. Power and auto forecasting partner LMC Automotive.

Based on sales data collected during the first 17 days of the month, January total (retail and fleet) deliveries are expected to hit 1.1 million units—up 3.4% from last January, when adjusted for two fewer selling days this year.* The two extra selling days a year ago generated a higher total sales tally of 1.49 million units. Yet, this month the seasonally adjusted annual sales rate (SAAR) for total deliveries is 16.8 million units—100,000 units stronger than last year’s 16.7 million-unit SAAR and the highest rate in a decade.

Retail deliveries this month are set to rise 2.9%, to 876,000 units vs. last year’s 922,055 units on a selling-day adjusted basis. During the snowbound weekend (Jan. 22-24), the Power Information Network® (PIN) from J.D. Power estimated that new-vehicle sales slumped 30% in East Coast regions, compared with a year ago, while western regional sales improved 5%.

“The snowstorm on the East Coast disrupted an estimated 15,000 unit sales,” said John Humphrey, J.D. Power senior vice president and general manager of the global automotive practice. He added, “We’re still seeing a strong month. Sales weren’t necessarily lost during the storm—they likely will be made up during the rest of the month, and a majority will be recovered in February.”

In addition to retail sales projections, fleet volume for the month is projected to rise 5.4% vs. last year on a selling-day adjusted basis and account for a 20% share of total sales—the same share as a year ago.

Even with inclement weather, the $30,769 average transaction price for a new model was the highest for any January, surpassing the previous high mark of $30,707 set in 2015.

Looking ahead, LMC Automotive’s Jeff Schuster, senior vice president of forecasting, expects another record year of sales in 2016, with a projection of 17.8 million units. However, the forecast for retail sales has been lowered by 500,000 units, to 14.5 million. Schuster suggested that the growth rate will slow as the year continues, and noted, “There will be a higher level of competitive intensity and pressure on each brand.”

*The percentage of change is adjusted for two fewer selling days. January 2016 has 24 selling days, while January 2015 had 26 days.
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