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January U.S. Auto Sales Expected to Dip after Strong 2016 Finish

January U.S. Auto Sales Expected to Dip after Strong 2016 Finish

By Philly Murtha, January 30, 2017
It’s not unexpected that total (retail and fleet) light-vehicle sales in January will recede by 1.8% to fewer than 1.13 million units, down from last January’s 1.15 million units, especially after a strong year-end close in December 2016, according to a sales forecast update from J.D. Power and auto forecasting partner LMC Automotive.

Light trucks continue to be top sellers in January, accounting for 63.3% of the retail sales mix so far, which is the highest level for any January, according to the update. However, truck share is a point lower than the 64.4% share of retail sales in December 2016.

Based on sales data collected during the first 16 selling days of the month, retail new-car and light-truck deliveries are set to reach 874,400 units this month, which is down 2% from 892,119 units delivered in January 2016. Fleet sales as a portion of total new-vehicle sales are expected to dip by 1.1%, but account for 22% of the total sales mix, which matches last January.

In commenting on January’s sales start, Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power, said, “While this year will mark the first time that the industry has started off with a retail sales decline since 2010, the selling pace remains robust,” although she noted that inventory levels are high and incentives continue to rise.

On the bright side, Jeff Schuster, senior vice president at forecasting partner LMC Automotive, said, “After an overheated close to 2016 and the increased likelihood of deregulation and fiscal stimulus from the Trump administration, which will drive the economy higher, we now expect 2017 to be another record year for U.S. auto sales.” Yet, Schuster cautioned, with a large number of lease maturities this year, there will be more used-vehicle options to compete with the new-vehicle market.

LMC Automotive projects that total light-vehicle sales in 2017 will rise only a slight 0.1% from 2016 to 17.6 million units.
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