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Robust Auto Sales Kick Off the New Year

Robust Auto Sales Kick Off the New Year

By Jeff Youngs, January 25, 2013
In a joint report issued today by J.D. Power and Associates and LMC Automotive, new-vehicle retail sales reflect the highest selling rate for the month of January in five years, prompting an upward revision of the annual 2013 sales forecast by 100,000 vehicles to 15.1 million units.

"The year is off to a fast start, which bodes well for the remainder of 2013," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "Building on the momentum the industry has been gaining over the past two years, sales remain on a trajectory to return to pre-recession levels within the next few years."

With strong sales comes a concern that suppliers might not be able to keep pace with heavy consumer demand for new vehicles. "The good news is that the U.S. market is primed to over-deliver as the recovery heats up, said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The concern now is shifting from the continuing recovery to whether the automotive supply base will be able to keep up with hearty demand."

LMC Automotive notes that inventory levels are down to an "ideal" 59-day supply, and that production levels are expected to rise 3% in 2013 compared to 2012, with another increase forecasted for 2014.

"With inventory in check and demand remaining strong, all indications suggest that production levels--and automotive supplier profits--will be at a high pace during 2013 for North America," said Schuster.