(May 24, 2013) WESTLAKE VILLAGE, Calif. — Robust new-vehicle retail sales in May are the driving factor of returning total sales above the 15-million unit selling level for the month, according to a monthly sales forecast developed by J.D. Power & Associates' Power Information Network (PIN) and LMC Automotive.

New-vehicle retail sales in May are projected to come in at 1,157,900 vehicles, which represent a seasonally adjusted annualized rate (SAAR) of 12.5 million units, the highest level since January, and will be the third consecutive month with retail sales in excess of 1 million units. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

The full-size pickup segment is contributing to the overall strong sales pace in May, accounting for 11.4 percent of industry retail sales, an increase from 11 percent in April and up from 9.7 percent in May 2012.

Strong demand for full-size pickups is also helping to keep industry average transaction prices at record levels. The average transaction price for all new vehicles thus far in May is $28,921, the highest ever for the month of May and 3 percent higher than May 2012.

Several components are contributing to strong industry transaction price performance, including: low interest rates, which help keep monthly payments low; the use of extended-term vehicle loans — 72 months or longer—which also help reduce monthly payments; strong used vehicle values, which equate to more trade-in equity; and strong new-vehicle residual values, which lower new-vehicle lease payments.

"Collectively, these components mean that while industry new-vehicle transaction prices have risen by 19 percent during the past six years ($28,921 in May 2013 from $24,404 in May 2008), the average monthly payment for new-car buyers and lessees has increased only 3 percent ($455 in May 2013 vs. $443 in May 2008)," said John Humphrey, senior vice president of the global automotive practice at J.D. Power & Associates.

"This market dynamic is enabling consumers to purchase new vehicles with improved fuel economy, safety and technology at an affordable monthly payment."

Total light-vehicle sales in May 2013 are expected to increase to 1,439,400, up 8 percent from May 2012. Fleet sales have generally been weaker than expected in 2013, but continue to average nearly 21 percent of total sales. Fleet sales in May 2013 are projected to reach 281,000 units, representing less than 20 percent of total sales.