Search in:
This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Review our Privacy and Cookie Notice for more details. X

Car Buyers "Unfazed" by Fiscal Cliff Negotiations

Car Buyers "Unfazed" by Fiscal Cliff Negotiations

By Jeff Youngs, December 21, 2012
Despite ongoing negotiations between Democrats and Republicans over tax rates and government spending, which if unresolved would increase taxes on most citizens, the new-vehicle retail sales rate "remains robust," according to a report by J.D. Power and Associates Power Information Network(R) (PIN) and LMC Automotive. According to the two companies, December new-vehicle retail sales should reach 1,152,500 units, putting total sales for 2012 approximately 500,000 units above expectations.

In response to continued strong sales, LMC Automotive has increased its total light-vehicle sales forecast from 14.4 million units to 14.5 million units. "The U.S. light-vehicle sales market continues to be a bright spot in the tremulous global environment," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The only major roadblock ahead for the U.S. market is the fiscal cliff. Assuming that hurdle is cleared, 2013 is one step closer to a stable and sustainable growth rate for autos, with volume above the 15 million unit mark."

Of vehicles sold in December, 16% are expected to be luxury models, the highest monthly share for 2012 and the highest share since December 2009, when 16.2% of all vehicles sold were luxury models. "Luxury sales always do well this time of the year, but December is turning out to be a great month," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, pointing to new and redesigned models combined with "enhanced" incentives on these types of vehicles.

The new-vehicle retail market continues to reflect impacts from Hurricane Sandy at the end of October. Vehicle inventories have fallen to a 69-day supply due to a strong sales pace in November, and both J.D. Power and LMC Automotive expect inventory to continue to tighten as automakers close assembly plants during the holidays and as light-vehicle sales remain brisk.