(January 28, 2016) IRVINE, Calif. — New-vehicle sales are expected to decrease 3 percent year-over-year to a total of 1.12 million units in January, resulting in an estimated 17.1 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book kbb.com,

"This month's new-car sales were impacted by the historic blizzard Jonas that covered much of the East Coast in snow late in January," said Tim Fleming, analyst for Kelley Blue Book. 

"Since the blizzard hit densely populated areas during a weekend, when dealerships see the most foot traffic, Kelley Blue Book anticipates sales to dip slightly; however, any lost sales will likely be postponed until February.  January is typically the slowest month of the year for automotive sales, as consumers recover from the holiday season and pull forward many purchases into December to take advantage of available year-end deals."

After the highest U.S. sales record in 2015, Kelley Blue Book's forecast in the new year calls for sales in the range of 17.5 to 18 million, which could put the industry at a flat sales year or set another record.  However, there are downside risks that could disrupt the current momentum, including rising supply of good condition off-lease used cars, potential interest rate hikes and uncertainty in global stock markets.

Key highlights for estimated January 2016 sales forecast:

    • In January, new light-vehicle sales, including fleet, are expected to hit 1,120,000 units, down 3 percent from January 2015 and down 32 percent from December 2015.

    • The seasonally adjusted annual rate (SAAR) for January 2016 is estimated to be 17.1 million, up from 16.6 million in January 2015 and down from 17.2 million in December 2015.

    • Retail sales are expected to account for 81.5 percent of volume in January 2016, up from 81.2 percent in January 2015.

Fiat Chrysler could lead major manufacturers in year-over-year growth at around 1 percent.

"Low gas prices and growing consumer interest in utility vehicles helped Jeep grow nearly 25 percent last year, and 2016 should also be strong for the brand," said Fleming.  "However, incentive spending for the brand has been growing in addition to days to turn, indicating that consumer demand may be slowing to some degree."

American Honda also could capture market share this month and is expected to report 9 percent year-over-year strength.  Sales will be boosted primarily by the all-new Civic sedan, which is still growing in availability at dealerships, and a restyled Accord.



Compact car segment will be the one to watch in 2016

With gas prices at their lowest point since 2009, SUVs will continue to grow in popularity in 2016, especially in the compact SUV segment.  In fact, some automakers have multiple models in this segment, which are contributing to this growth.  Kelley Blue Book analysts expect the compact SUV segment to grow by double digits in January, kicking off a very strong year.

"One segment to watch in 2016 will be compact cars.  Similar to mid-size cars, market share for these models has been declining for the past three years," said Fleming.  "While this trend could continue this year, three of the top four models in this segment (Honda Civic, Chevrolet Cruze and Hyundai Elantra) will have redesigned models on the market in the first half of the year.  Much of the focus recently has been on the booming growth of small SUVs, but the new small cars on the way could spark consumer interest."