U.S. Auto Sales Forecast Increases for 2014 and 2015 on Strength of Job Growth, Low Gas Prices
By Jeff Youngs, December 19, 2014
New-vehicle retail sales for December are expected to reach their highest levels since 2006 on a seasonally adjusted annualized rate (SAAR) basis, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.
The forecast projects that new-vehicle retail sales in December 2014 will reach 1.3 million units, an increase over December 2013 of 7% on a selling-day adjusted basis. (December 2014 has one more selling day than December 2013.) The retail SAAR for December--14.2 million units--is expected to be above 14 million units for the third time this year, and 1.4 million units stronger than December 2013. The most recent month in which the retail SAAR was 14.2 million units was in August 2006.
"The industry continues to demonstrate strong sales growth as the year comes to a close," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The end of the year typically drives more showroom traffic as customers seek to take advantage of better deals used to clear out inventory in preparation for the new year. In fact, December 31 was the strongest sales day of the year in 2013, bringing in more than 118,000 units, or 10% of the month's sales."
Total light-vehicle sales (including retail and fleet sales) in December 2014 are expected to reach 1.5 million units, an increase of 6% compared with December 2013. Fleet volume in December is projected to come in at 233,000 units, or 16% of total sales, which is below the year-to-date trend of 18%.
LMC Automotive's 2014 U.S. light-vehicle retail sales forecast remains at 13.6 million units, but strong November and December sales have pushed the total light-vehicle forecast to 16.5 million units. The previous total light-vehicle sales forecast was 16.4 million. LMC Automotive has raised its retail sales forecast for 2015 to 14.0 million units from 13.9 million and increased its total light-vehicle sales forecast to 17.0 million units from 16.8 million.
"The prospects for auto sales to overachieve in 2015 are moving closer to reality as 2014 goes out on a high note," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Economic bliss, driven by job creation, wage growth, and low gas prices may drive consumers to showrooms at a faster pace, emphasizing the notion that this recovery may not be over quite yet."
New-vehicle production in North America in November 2014 was 1.37 million units, a decline of 2% from November 2013. Production in North America in 2014 is up 4% through November, compared with the same period in 2013. LMC Automotive's 2014 North American production forecast remains at 16.9 million units--an increase of 5% over 2013.
Vehicle inventory levels at the start of December 2014 were at a 71-day supply, 5 days lower than in November and 6 days lower than in December 2013.