J.D. Power: New-vehicle retail sales show strength

(August 24, 2012) WESTLAKE VILLAGE, Calif. — The August new-vehicle selling rate is expected to be the highest monthly rate in more than four and one-half years, according to a monthly sales forecast developed by J.D. Power and Associates' Power Information Network (PIN) and LMC Automotive.

August new-vehicle retail sales are projected to come in at 1,066,200 units, which represents a seasonally adjusted annualized rate (SAAR) of 12.3 million units. The year-over-year growth rate in retail sales continues a double-digit trend for a fourth consecutive month. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"August continues this summer's trend of healthy growth in retail sales as dealers work to sell down inventory in time to make room for 2013 models," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "To date, automakers have been diligent in better balancing production with demand, which has been critical to the improved financial performance for many brands. Going forward, this discipline will be tested as demand looks to cool somewhat through the balance of the year."

While incentives are down slightly in August, compared with July ($106 less per vehicle, on average), there are deals driving some activity as the model-year sell down takes hold. Consumers are pushing aside the economic risks, as the need to replace their current vehicle is matched by availability of both inventory and credit.

Total light-vehicle sales remain stable, with the volume in August expected to come in at 1,285,300 units, a 16 percent increase from August 2011. Fleet represents only 17 percent of total light-vehicle sales, which is lower than the 21 percent year-to-date average.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons


August 20121

July 2012

August 2011

New-Vehicle Retail Sales

1,066,200 units

(18% higher than August 2011)2

969,983 units

870,365 units

Total Vehicle Sales

1,285,300 units

(16% higher than August 2011)

1,151,818 units

1,069,843 units

Retail SAAR

12.3 million units

11.5 million units

 9.6 million units

Total SAAR

14.5 million units

14.1 million units

12.1 million units

1Figures cited for August 2012 are forecasted based on the first 16 selling days of the month.
2The percentage change is adjusted based on the number of selling days in the month (27 days in August 2012 vs. 26 days in 2011).