New-Vehicle Sales in 2015 Off to a Strong Start; January Retail Sales Highest Since 2004
By Jeff Youngs, January 27, 2015
Retail sales of new vehicles in January are projected to reach a higher level than in any January since 2004, 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.
New-vehicle retail sales in January 2015 are projected to reach 932,000 units, an increase of 8.5% compared with January 2014 on a selling-day adjusted basis (January 2015 has one more selling day than January 2014). The retail SAAR in January is expected to be 13.9 million units, compared with 12.9 million units in 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 noted that consumers are purchasing more trucks, probably due to the ongoing decline in fuel prices. So far in January, trucks, vans, and SUVs account for 55.4% of total vehicle sales--the highest level for a January since 2004.
Total light-vehicle sales (that is, retail and fleet sales) in January 2015 are expected to reach 1.1 million units, an increase of 8% compared with January 2014. Fleet volume in January, which represents 18% of total sales, is projected to come in at 204,000 units.
Statistics for the entirety of 2014 indicate a strong year, with total light-vehicle sales finishing at 16.5 million and retail light-vehicle sales at 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 three 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."
Total vehicle production in North America for 2014 amounted to 16.9 million units, an increase of 5% over 2013. Production in December alone came to 1.2 million units, an increase of 16% over December 2013.
Vehicle production in North America is expected to continue to increase in 2015, too, but at a slower rate. LMC Automotive maintains the current forecast for North American production at 17.4 million for 2015, up 3% over 2014. Production in the first quarter of 2015 is projected to reach 4.3 million units, up 4% compared with the same period in 2014.