WESTLAKE VILLAGE, Calif.: 23 May 2013 — Robust new-vehicle retail sales in May are the driving factor of returning total sales above the 15-million unit selling level for the month, according to a monthly sales forecast developed by the Power Information Network® (PIN) from J.D. Power and LMC Automotive.
Retail Light-Vehicle Sales
New-vehicle retail sales in May are projected to come in at 1,157,900 vehicles, which represent a seasonally adjusted annualized rate (SAAR) of 12.5 million units, the highest level since January, and will be the third consecutive month with retail sales in excess of 1 million units. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.
The full-size pickup segment is contributing to the overall strong sales pace in May, accounting for 11.4 percent of industry retail sales, an increase from 11 percent in April and up from 9.7 percent in May 2012.
U.S. Retail SAAR—May 2012 to May 2013
(in millions of units)
Strong demand for full-size pickups is also helping to keep industry average transaction prices at record levels. The average transaction price for all new vehicles thus far in May is $28,921, the highest ever for the month of May and 3 percent higher than May 2012. Several components are contributing to strong industry transaction price performance, including: low interest rates, which help keep monthly payments low; the use of extended-term vehicle loans—72 months or longer—which also help reduce monthly payments; strong used vehicle values, which equate to more trade-in equity; and strong new-vehicle residual values, which lower new-vehicle lease payments.
"Collectively, these components mean that while industry new-vehicle transaction prices have risen by 19 percent during the past six years ($28,921 in May 2013 from $24,404 in May 2008), the average monthly payment for new-car buyers and lessees has increased only 3 percent ($455 in May 2013 vs. $443 in May 2008)," said John Humphrey, senior vice president of the global automotive practice at J.D. Power & Associates. "This market dynamic is enabling consumers to purchase new vehicles with improved fuel economy, safety and technology at an affordable monthly payment."
Total Light-Vehicle Sales
Total light-vehicle sales in May 2013 are expected to increase to 1,439,400, up 8 percent from May 2012. Fleet sales have generally been weaker than expected in 2013, but continue to average nearly 21 percent of total sales. Fleet sales in May 2013 are projected to reach 281,000 units, representing less than 20 percent of total sales.
J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons
1Figures cited for May 2013 are forecasted based on the first 10 selling days of the month.
LMC Automotive is holding the total light-vehicle sales outlook for 2013 at 15.4 million units. The 2013 outlook for retail light-vehicle sales also remains the same, at 12.5 million units.
"This is the time of year when the automotive industry holds its collective breath as the recent past has dealt with a spring slowdown in demand; however, the current pace suggests full steam ahead for the second half of 2013," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Economic and market headwinds have been minimized, while demand continues to build momentum."
North American Production
North American light-vehicle production year to date through mid-May is up 4 percent, compared with the same period in 2012. Most major manufacturer volumes are either flat or up slightly, with the exception of General Motors, which is down 4 percent on the transition of the Impala and weaker large SUV sales ahead of the new models for 2014.
Vehicle inventory levels in early May are at 3.2 million units—a 63-day supply—and consistent with the current level of demand. Inventory was at a 55-day supply in May 2012.
LMC Automotive is increasing its forecast for 2013 North American production to 16.0 million from 15.9 million units. With this increase, 2013 will mark the first time production in the region has been at the 16 million-unit level since 2002.
"With several manufacturers at or near capacity, it becomes a balancing act to plan production for the remainder of the year," said Schuster. "An effective way to manage the near-term demand and increase production levels is to reduce planned summer shutdowns, as the Detroit automakers recently announced."
About J.D. Power & Associates
Headquartered in Westlake Village, Calif., J.D. Power & Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com
. J.D. Power & Associates is a business unit of McGraw-Hill Financial.
About McGraw Hill Financial
McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.
About LMC Automotive
LMC Automotive, formerly J.D. Power Automotive Forecasting, is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC's global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has offices in the United States, the UK, Germany, China and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector. For more information please visit www.lmc-auto.com
Media Relations Contacts:
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