(July 2010) In its latest forecast, J.D. Power and Associates projects that North American new-vehicle sales will advance this year by 12% from 2009, with increases in the United States, Mexico and Canada markets.

U.S. total sales (retail and fleet) are expected to reach 11.8 million units—up 13% from 2009, based on Power Information Network (PIN) retail transaction data and analysis from J.D. Power Automotive Forecasting.

Key elements in the J.D. Power North American outlook include:

• Although overall North American new-vehicle sales (retail and fleet) are expected to increase this year to 14.2 million units, the forecast will still be 25% below pre-recession 2007 levels.
 
• Despite slower growth in the U.S. market between May and June, retail new-vehicle sales improved year-over-year to a seasonally adjusted annual rate (SAAR) of 11.0 million units in June 2010, up from 9.7 million units in the same month a year ago.
 
• Mexico is projected to achieve the largest year-over-year gain this year, with a 14% increase in new-vehicle sales in 2010 vs. 2009. However, the Mexico sales forecast of 860,000 units is below Mexico’s peak total of 1.1 million units in 2007.
 
• Canada’s light-vehicle sales are projected to rise 5% from 2009, to a total of 1.53 million units in 2010.

Implication: Due to the increasing likelihood of a slower recovery in the U.S. market, there remains a possibility that final sales totals for 2010 could be 200,000 units below the current forecast. Even though there is year-over-year improvement, sales are still down by 25% from pre-recessionary levels.

— Jeff Schuster, executive director of global forecasting at J.D. Power and Associates