DETROIT: 24 Feb. 2017 — Total vehicle sales in February are expected to be similar to a year ago while incentives remain at record levels, according to a forecast developed jointly by J.D. Power and LMC Automotive.
U.S. new-vehicle retail sales in February are expected to reach 1,033,100 units, a 0.4% increase compared with February 2016, while total light-vehicle sales are expected to reach 1,349,800 units, a 0.6% increase.
Through the first 12 days of February, incentive spending per unit was $3,748, the highest level ever for the month of February and up $294 from February 2016 ($3,454). Despite the high incentive levels, transaction prices also continue to rise, reaching $31,483, also a record for the month of February. Incentives as a percentage of MSRP were at 10.3%, exceeding the 10% level in February for the first time since 2009. Then, it reached 11.2% as the industry was navigating the financial collapse of 2008/2009.
“We expect February to eke out a small increase over last year, despite bad weather giving a slow start to the month,” said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power. “However, while the retail SAAR remains robust, the elevated levels of incentives remain a fundamental threat to the long-term health of the industry.”
J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons
New-Vehicle Retail Sales
(0.4% higher than February 2016)
Total Vehicle Sales
(0.6% higher than February 2016)
13.8 million units
14.0 million units
13.7 million units
17.7 million units
17.5 million units
17.6 million units
1Figures cited for February 2017 are forecasted based on the first 16 selling days of the month.
- Fleet sales are expected to total 316,700 units in February, up 1.4% from February 2016. Fleet volume is expected to account for 23.5% of total light-vehicle sales, a slight increase from 23.3% in February 2016.
- The average new-vehicle retail transaction price to date in February is $31,483, a record for the month, and surpassing the previous high of $30,682 set in February 2016.
- With record transaction prices for the month and slightly higher retail sales volumes, consumers are on pace to spend $32.5 billion on new vehicles in February, about $1 billion more than last year’s level and a record for the month.
- Trucks account for 63.7% of new-vehicle retail sales so far in February—the highest level ever for the month of February. However, truck sales mix is down slightly from December’s all-time record level of 64.4%.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “Light-vehicle demand in the United States is tracking as expected and maintaining a strong overall level of demand. It’s influenced by variables that will be playing out as the year progresses, including level of economic growth, a potential border tax, lease maturities and the introduction of more than 60 new models. In addition, the balancing act between relatively high inventory levels and incentive spending will be closely watched as an indicator for the health of the auto industry.”
LMC is maintaining its forecast of total light-vehicle sales in 2017 at 17.6 million units, an increase of just 0.2% from 2016. The forecast for retail light-vehicle sales is holding at 14.1 million units in 2017, essentially flat from 2016.
U.S. Retail SAAR—February 2016 to February 2017
(in millions of units)
Source: Power Information Network® (PIN) from J.D. Power
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info
About LMC Automotive www.lmc-auto.com.
Media Relations Contacts
Geno Effler; Costa Mesa, Calif.; 714-621-6224; email@example.com
Emmie Littlejohn; LMC Automotive; Troy, Mich.; 248-817-2100; firstname.lastname@example.org
No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power or LMC Automotive. www.jdpower.com/corporate www.lmc-auto.com