January new-vehicle sales show continued strength, J.D. Power says

(January 26, 2012) WESTLAKE VILLAGE, Calif. — New-vehicle retail sales performance in January is abating fears of any reversal from the strong close to 2011, according to a monthly sales forecast developed by J.D. Power and Associates Power Information Network (PIN) and LMC Automotive.

January new-vehicle retail sales are projected to come in at 681,000 units, an increase of 6 percent from January 2011. This represents a seasonally adjusted annualized rate (SAAR) of 10.9 million units, which is lower than the selling rate in December 2011 but well above January 2011. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

“Retail light-vehicle sales in January are showing stability coming off the 2011 high note in December,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “Vehicles are currently remaining on dealer lots for fewer than 50 days on average, which is the lowest level for January for the past several years. This is a good indication that pent-up demand is beginning to return to the market.”

U.S. Retail SAAR—January 2011 to January 2012 (in millions of units)


Total light-vehicle sales in January are expected to come in at 869,600 units, which is 6 percent higher than in January 2011. Fleet sales are expected to increase by 9 percent compared with January 2011, accounting for 22 percent of total sales.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

 

January 20121

December 2011

January 2011

New-vehicle retail sales

681,000 units

(6% higher than January 2011)

1,040,035 units

644,695 units

Total vehicle sales

869,600 units

(6% higher than January 2011)

1,240,263 units

817,621 units

Retail SAAR

10.9 million units

11.3 million units

10.3 million units

Total SAAR

13.5 million units

13.5 million units

12.7 million units

 1Figures cited for January 2012 are forecasted based on the first 16 selling days of the month.

January sales are sustaining the momentum gained in December 2011.  The traction gained in 2011, which ended on a high note for both retail and total light-vehicle sales, is carrying over into 2012 and building a foundation for strong sales this year.  

LMC Automotive is maintaining its forecast for 2012 at 13.8 million units for total light-vehicle sales and 11.3 million units for retail light-vehicle sales.

“The upward movement of auto sales during the second half of 2011 and the stabilization of that trend in January casts a favorable light on 2012, despite the macro-level risks the industry continues to face,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “Coming off the North American International Auto Show in Detroit, a renewed sense of optimism is returning to the industry, as the focus continues to shift from survival to planning for the future.”

North American light-vehicle production ended nearly 10 percent higher in 2011, compared with 2010, according to LMC Automotive. Volume came in at 13.0 million units, an increase of 1.2 million units from 2010. The Detroit 3 OEMs outperformed the total industry in 2011, with a 15 percent increase in production from 2010. European OEMs also saw significant production increases (up more than 34 percent), supported by increased localization.  Production by Japanese OEMs was down more than 5 percent from 2010 due to supply chain challenges resulting from the Japanese earthquake/tsunami and Thailand flooding disasters.  Hyundai’s North American production increased by 44 percent, as they also increased their manufacturing operations in North America.

Vehicle inventory declined slightly to a 52-day supply at the beginning of January (compared with a 61-day supply at the beginning of December), due to strong December 2011 sales and the holiday production shutdown last month.  Car inventory was at a 55-day supply in January, down from 59 days in December, while truck inventory levels fell to a 50-day supply (previously at 63 days).

“As industry-level inventory has returned to a healthy level, the need for a disciplined balance and management of supply and demand will continue to return as well,” said Schuster.

LMC Automotive’s 2012 North American production forecast is at 13.8 million units, an increase of six percent from 2011.