J.D. Power: New-vehicle selling rate in March keeps pace

(March 28, 2013) WESTLAKE VILLAGE, Calif. — New-vehicle sales remain strong in March, as both the light-vehicle retail selling rate and the total light-vehicle rate are consistent with February's performance at 12.1 million units and 15.3 million units, respectively, according to a monthly sales forecast developed by J.D. Power and Associates' Power Information Network (PIN) and LMC Automotive.

March new-vehicle retail sales are expected to come in at 1,158,000 vehicles, which represent a seasonally adjusted annualized rate (SAAR) of 12.1 million units, with volume approaching a double-digit increase from March 2012. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

The average new-vehicle customer-facing retail transaction price ($28,504) is up 3 percent from March 2012. Leases account for 23.1 percent of new-vehicle retail transactions in March 2013, up from 20.0 percent in March 2012.

In addition, the percentage of retail sales with a 72-month or longer loan is at record levels, reaching 32.1 percent in March 2013, an increase from 30.4 percent in March 2012.

"While longer loan terms have traditionally been a cause for concern to the industry due to the risk of purchase cycle extension, it is not necessarily as daunting as it may seem." said John Humphrey, senior vice president of the global automotive practice at J.D. Power and Associates. "The longer loans are being offset by more leasing and the low interest environment, which means that consumers are able to put more of their monthly payment towards their loan principal rather than interest fees."

Humphrey also notes that strong used-car values mean that consumers have more equity in their trades and can finance lower amounts. In addition, consumers who may have been shut out of the market in recent years are finding that a longer loan makes buying a new vehicle affordable.

Total light-vehicle sales in March 2013 are projected to reach 1,465,100 units, an 8 percent increase from March 2012, with a selling rate that is consistent with the expected performance for the year. Fleet share is expected to hold at 21 percent.

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

 
 

March 20131

February 2013

March 2012

New-Vehicle Retail

Sales

1,158,000 units2

(10% higher than March 2012)

928,130 units

1,093,601 units

Total Vehicle Sales

1,465,100 units

(8% higher than March 2012)

1,190,707 units

1,402,503 units

Retail SAAR

12.1 million units

12.1 million units

11.4 million units

Total SAAR

15.3 million units

15.3 million units

14.1 million units

1Figures cited for March 2013 are forecasted based on the first 14 selling days of the month.

2The percentage change is adjusted based on the number of selling days in the month (27 days in March 2013 vs. 28 days in March 2012).