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Healthy New-Vehicle Demand Exists Despite Severe Winter Weather

Healthy New-Vehicle Demand Exists Despite Severe Winter Weather

By Jeff Youngs, February 24, 2014
According to a monthly auto sales forecast from J.D. Power and LMC Automotive, demand for new vehicles in the United States remains strong even as severe winter weather has suppressed sales since the start of 2014. Not only are consumers expected to return to showrooms in greater numbers as the weather moderates, J.D. Power and LMC Automotive predict a record average transaction price for the month of February.

"Although severe weather impacted sales in early February, the negative effect should be somewhat mitigated since the majority of vehicle sales occur in the second half of the month," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The industry is on track to reach its highest-ever average transaction price for the month of February, with prices exceeding $29,000. This beats the previous record from February 2013 by more than $400."

In addition to forecasting a record transaction price for the month of February, the firms expect new-vehicle sales to increase 5% over the same month in 2013. LMC Automotive is also holding steady its prediction that annual sales will reach 16.2 million units, despite the bitterly cold winter weather and slow start to the year. However, LMC Automotive does note that all automakers except for Subaru are experiencing bloated inventories. If they are unsuccessful at resolving the situation by summer, production cuts may loom during the second half of the year.

Given that cold air and possibly snow are scheduled to return to the eastern portion of the United States in the final week of February, that most automakers are running Presidents' Day sales programs through the end of the month, and that dealers are eager to move cars off of showroom floors, now might be a terrific time to get a great deal on a new vehicle.