(March 21, 2015) WESTLAKE VILLAGE, Calif. —  U.S. total new-vehicle sales in March 2015 are bouncing back from last month and are expected to reach their highest levels for the month in a decade, according to a monthly sales forecast from J.D. Power and LMC Automotive.

After winter storms stymied sales in February, total new light-vehicle sales in March 2015 are expected to reach 1,539,600 units, a 4 percent increase on a selling-day adjusted basis compared with March 2014 and their highest levels for the month since March 2005 when 1,572,909 new vehicles were sold.

The retail seasonally adjusted annualized selling rate (SAAR) in March is expected to be 13.6 million units, 449,000 units stronger than in March 2014 and the highest retail SAAR for the month since March 2002 (14.8 million).

"Inclement weather in February caused many consumers to delay their new-vehicle purchase until March," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "Other key industry metrics continue to demonstrate the industry's underlying strength. The average new-vehicle transaction price so far in March is $30,530, the highest level ever for the month of March."

The combination of strong sales and high transaction prices positions March to set a new record for the month for consumer spending on new vehicles at approximately $37.7 billion, according to the Power Information Network (PIN) from J.D. Power.



Humphrey notes that elevated transaction prices continue to be enabled by extended term loans. Thus far in March, extended term financing (loans of 72 months or longer) has been used in more than 35 percent of retail deliveries, on pace to set a new record for any month.

Fleet volume in March is projected to hit 304,900 units — accounting for 20 percent of total sales — which is consistent with the year-to-date level. Fleet volume is expected to fall as the year progresses.

LMC Automotive is holding its 2015 U.S. forecast at 14.0 million units for retail sales and 17.0 million for total light-vehicle sales, both an increase of 3 percent from 2014.

"Autos didn't escape a weather-driven hit to the vigorous selling rate trend in February, but upward performance returns in March and is expected to continue throughout the year," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "The U.S. continues to be one of the brighter spots in the global vehicle sales picture in 2015 with stable volume growth."

North American Production

The West Coast port strike, slow ramp-ups of new launches, weather and inventory corrections led to a reduction in overall production in February, compared with a year ago.  Despite negative pressures, output declined by less than 1 percent to 1.38 million units, signaling a stable environment for continued growth. Manufacturers were also able to clear a significant amount of inventory, as levels declined to a 69-day supply at the beginning of March, down from 82 days in February.

LMC Automotive production forecast for 2015 remains at 17.5 million units, a 3 percent gain from 2014. The small and compact segments will comprise more than 60 percent of the volume growth, with the compact premium car segment projected to have the largest volume growth at nearly 90,000 units.