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New-Vehicle Sales Remain Strong through September

New-Vehicle Sales Remain Strong through September

By Jeff Youngs, September 21, 2012
According to retail sales transaction data compiled by J.D. Power and Associates and LMC Automotive, in the first half of September, new-vehicle sales rose 15% over the same period in 2011. John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, said this increase "is reflective of a healthy market. We expect retail sales to level off through the rest of the month."

J.D. Power and LMC Automotive note that vehicle inventory levels are in check, and that fleet sales are expected to show only a slight increase over September of 2011.

Nevertheless, all vehicle segments except for midsize SUVs and full-size pickups are expected to show sales gains compared with last September, with the greatest year-over-year growth in the sub-compact conventional, compact conventional, and midsize conventional car categories. Each of these vehicle segments is expected to increase 25% from last year.

Despite strong September sales, LMC Automotive's total light-vehicle sales projection for 2012 remains at 14.3 million units, and the company continues to expect sales to rise to 15 million units in 2013.

"Consumer willingness or need to overlook the economic uncertainty is the driving force behind the recent strength in light-vehicle sales," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "During the next few months, car buyers will be processing further economic news, additional details on the European crisis, as well as the forthcoming presidential election, likely creating an environment with higher volatility."

Still, stronger sales have led to a 22% increase in light-vehicle production volume. According to LMC Automotive, U.S. manufacturing growth is leading the North American region, with a 25% year-to-date increase. Production in Mexico is up 14%, and production in Canada has increased 20% year to date, though continued labor negotiations with the Canadian Auto Workers union could put continued volume for the remainder of the year at risk.

"Production volume continues its torrid pace as the fourth quarter comes into light, which is great financial news for automotive suppliers, but the overall level is edging toward capacity constraints with various vehicle components," said Schuster.

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