(February 2, 2020) New-vehicle retail sales in January are expected to be down from a year ago, according to a forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 854,900 units, a -0.4% decrease compared with January 2019.

J.D. Power and LMC Automotive are forecasting full year 2020 retail sales to reach 13.48 million units, a decline of 205,000 units from 2019.

Total sales in January are projected to reach 1,124,700 units, a 0.6% decrease compared with January 2019. The seasonally adjusted annualized rate (SAAR) for total sales is expected to be 16.7 million units, flat from a year ago.

J.D. Power and LMC Automotive are forecasting full year 2020 total sales to reach 16.78 million units, a decline of 212,000 units from 2019.

Thomas King, President of the Data and Analytics Division at J.D. Powe, said: “In a retail market that is expected to decline for the fifth consecutive year, it’s important to remember that January is typically the lowest sales month of the year.”

On average, January accounts for only 6.3% of annual sales and is more than 30% lower than December 2019 sales.

“The larger concern remains the record level incentive spending supporting the underlying volume,” King added. “This marks the first time ever that we will start the year with spending above $4,000.” Incentive spending is on pace to reach $4,136 in January, an increase of $258 from last year. Spending on cars is expected to be up $328 to $3,952, while spending on trucks/SUVs is up $217 to $4,200.

Cars also continue to see reduced demand in the marketplace and are on pace to account for only 27% of retail sales in January, a decline of 3.7 percentage points from last year. This would be the first time that car retail share of industry started the year below 30%.