October 2014 New-Vehicle Retail Sales to Increase 6% From 2013
By Jeff Youngs, October 27, 2014
According to a forecast developed jointly by J.D. Power and LMC Automotive, new-vehicle retail sales are projected to reach 1.1 million units for October 2014, a 6% increase over the same month in 2013 and the highest level for the month since 2004. Retail sales are the most accurate measure of true consumer demand for new vehicles.
"The industry continues to demonstrate strong sales growth and robust transaction prices, resulting in another record-breaking month for industry consumer spending," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.
Humphrey credits improved economic conditions and greater consumer adoption of long-term financing for continued retail sales growth and escalating average transaction prices. According to the J.D. Power/LMC Automotive report, 32.6% of all new vehicles sold in October 2014 will be financed with a loan term of 72 months or longer.
Consumers are also buying SUVs in significant numbers. LMC Automotive says that SUV sales have increased 12% in 2014 compared with 2013, and will account for 34% of the light-vehicle market this year, up from 32% last year.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: "The market is clearly seeing a second wave of SUV popularity--with a wide variety of choices across the size spectrum--that will likely dominate market share for the foreseeable future."
Automakers reduced a significant amount of inventory in August, so assembly plants increased September production by 3.3% compared to the previous year in order to replenish supply. During the third quarter of 2014, compact SUV production increased by a greater amount than other vehicle segments. LMC Automotive says that North American production facilities are operating at or above a 90% utilization level.