(September 25, 2015) WESTLAKE VILLAGE, Calif. — Benefitting from an anomaly on the calendar, new-vehicle sales are headed to double-digit growth in September, with retail sales on pace for the strongest selling rate of any month in more than a decade, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

For the first time since 2012, Labor Day weekend falls in the industry's September sales month instead of August. Labor Day weekend is traditionally the biggest new-vehicle sales weekend of the year, as consumers take advantage of the holiday and model year-end sales promotions, as well as the availability of the new model-year vehicles arriving in showrooms.

Consumers purchased or leased more than 200,000 new vehicles over Labor Day weekend, or an expected 17 percent of September's sales.

Retail light-vehicle sales in September are projected to approach 1.2 million units, a 10.2 percent increase on a selling-day adjusted basis compared with September 2014, and the strongest sales volume for the month of September since 2004 when sales reached 1.2 million units.

The seasonally adjusted annualized rate (SAAR) for retail sales in September is expected to reach 14.9 million units, an increase of 1.2 million units from the selling rate in September 2014 (13.6 million units) and the highest for any month since July 2005 (16.7 million units). Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

"Having Labor Day sales count in September definitely gives the month a tremendous lift," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "On a selling-day adjusted basis, sales through the Labor Day weekend were 72 percent stronger than the same time last year."

While Labor Day weekend is leading the tremendous year-over-year growth, Humphrey noted that the industry remains strong with sales growth even after the holiday. Since Labor Day, sales are up 3 percent compared to the same period a year ago.

Truck sales historically tend to accelerate after Labor Day. So far in September, pickups and SUVs combined account for 57.8 percent of all retail new-vehicle sales, a 3.7 percentage point increase year over year and the highest level since July 2005. Compact SUVs and small SUVs have driven 3.4 percentage points of the increase. Thus far in September, both segments are at their highest share of industry retail sales ever at 15.8 percent and 4.8 percent, respectively, with both segments combined representing one in every five vehicles sold.

Total light-vehicle sales are expected to reach 1.4 million in September, an 8 percent increase on a selling-day adjusted basis, compared with September 2014. The SAAR for total sales in September is expected to be 17.7 million units, a 1.2 million unit increase from the selling rate in September 2014.

Fleet volume is projected at 241,000 units, a 1 percent increase on a selling-day adjusted basis from September 2014. Fleet sales are expected to account for 17.1 percent of total sales in September, down from 18.4 percent in September 2014 but stronger than the seasonally lower 14 percent level in July and August 2015.



Sales Outlook

As a result of the vigorous selling pace during the spring and summer months — the selling rate from May through August averaged 17.5 million units — LMC Automotive is raising its 2015 total light-vehicle sales forecast to 17.2 million units from 17.1 million units and its retail light-vehicle forecast to 14.1 million units from 14.0 million units.

"The Federal Reserve's decision to keep interest rates at the current level paves the way for the U.S. auto market to post strong results for the remainder of 2015, as the primary risk to volume—a rate increase—is likely pushed out to December or early 2016," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Sales the previous three months have significantly exceeded expectations, so if interest rates remain low, auto sales in 2016 will get a further boost from an economy that should accelerate."