J.D. Power Expert Outlines Key Forces behind U.S. Sales Growth

Deirdre Borrego presents auto industry outlook at J.D. Power Automotive Marketing Roundtable “The U.S. auto industry has enjoyed remarkable revenue growth this year,” Deirdre Borrego, J.D. Power vice president of client services, said during a presentation at the October J.D. Power Automotive Marketing Roundtable (AMR) in Las Vegas, NV. “From a consumer standpoint,” she said, “there are specific market forces that have kept sales strong and transaction prices high.” Borrego pointed to four key drivers:

• Long-term loans are a key enabler. Nearly one in three 2013 sales to date was facilitated by a loan of 72 months or longer. Extended terms, combined with. . .

• . . . Low interest rates have allowed consumers to buy a richer mix of vehicles while keeping their monthly payment within their household budget.

• Strong residuals enable manufacturers to offer attractive leases to consumers, again with desirable monthly payments.

• Tight used-vehicle supply is another key factor. The average price of a used vehicle increased by roughly $3,000 since 2008 to reach $18,800 so far this year. This drives stronger in-equity positions for existing owners, improving purchasing power or removing barriers to entry. Continue reading ›

April U.S. Auto Sales Edge Up, Primed by Retail Deliveries

CarLot03New car and light-truck sales in the U.S. market in April were weaker than expected, mainly due to slower fleet sales, according to analysis by J.D. Power and Associates’ Power Information Network® (PIN) and its strategic partner, LMC Automotive. On a bright note, sales of compact crossovers and large pickups in April outperformed the industry’s increase nearly fourfold.

Total sales (retail and fleet) in April edged up 4.3% from a year ago on a selling-day adjusted basis*, and the April seasonally adjusted annual selling rate (SAAR) averaged 14.9 million units—the slowest pace since October 2012. It was the first time in the first four months of the year that the pace dipped below 15.0 million units.

Retail sales were slightly better than anticipated, finishing the month at 1.032 million units, which was an increase of 9.1% from April 2012 on a selling-day adjusted basis. The retail SAAR was 12.1 million units, which was significantly stronger than last April’s 10.6 million-unit pace, and was 100,000 units stronger than the pace in March. Continue reading ›

The New Year Begins with Stronger-than-Expected U.S. Auto Sales

1Salesperson and Couple at DealershipJanuary new-vehicle sales in the U.S. market were stronger than expected. Sales climbed nearly 10% due to consumers continuing to trade in their current vehicles (vehicle age in the United States averages 11 years) for new ones or replacing vehicles damaged or totaled during last October’s East Coast Sandy superstorm.

Easier credit and discounts in some segments also made new-vehicle purchases and leases more viable in January. Compacts were still popular, partly due to gas prices beginning to rise again*, and there appears to be a revival in the light-truck segment due to the start of a comeback in the housing industry.

Detroit Three Achieve Double-Digit Sales Gains

It was a good month for Michigan. All three Detroit-based manufacturers—Fiat-Chrysler Group, Ford Motor Co., and General Motors Co.—reported that new-vehicle sales were up in double digits from January 2012. Continue reading ›

December and Calendar 2012 Finish Year with Encouraging Sales Numbers

Dealer LotThe 2012 calendar year finished on a resilient if not strong note with double-digit gains from 2011 for retail and even fleet sales. Despite a slightly slower pace at the end of the month, which may have been stalled by the down-to-the-wire “fiscal cliff” negotiations, nearly all multi-franchise automakers sold more new vehicles in December in the United States than in the previous year, according to analysis by J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. Total sales for 2012 also finished with double-digit gains from 2011.

Some final highlights for December and the 2012 calendar year:

For Calendar Year 2012:

• Total light-vehicle sales in the U.S. market finished 2012 at 14.46 million units, which is 13.5% above sales of 12.75 million units in 2011.

• 2012 retail deliveries reached 11.73 million units, up 13.6% from 2011 on a selling-day-adjusted basis.

• Fleet sales were slightly less robust in 2012—increasing by 12.8% from 2011. Continue reading ›

Demand for Replacement Vehicles Spurs December U.S. Auto Sales

Car buyer gets keys from DealerDecember nearly always is a strong sales month in the auto industry, and this past year’s 12th month auto sales results were no exception. Consumers in the United States continued to replace their aging vehicles at a faster pace than in the previous year.

The month’s light-vehicle deliveries rose 13.3% from a year ago to 1.353 million units, which translates to a 15.2 million-unit seasonally adjusted annual selling rate (SAAR), nearly matching an earlier forecast from our Power Information Network® (PIN) and strategic partner LMC Automotive. Sales in December were also boosted by consumers replacing vehicles totaled or damaged in late October’s Hurricane Sandy super storm on the East Coast.

Two German Automakers Post Leading Sales Gains in December

December also remained a strong month for luxury deliveries, as anticipated in earlier J.D. Power analysis. Two European automakers, Volkswagen and BMW Groups, sold nearly 40% more new vehicles than they delivered in December a year ago. Volkswagen Group’s Audi and Porsche luxury brands posted stellar sales in December and for calendar 2012. Porsche’s sales rose by more than 60% from a year ago. In addition, the mass-market VW brand was helped by strong sales of newer models such as the U.S.-made Passat and the Jetta. Continue reading ›

December U.S. Auto Sales Expected to Continue Double-Digit Climb

John Humphrey

John Humphrey

Despite economic uncertainty related to down-to-the-wire “fiscal cliff” negotiations about tax hikes and expenditure cuts that are slated to happen at the start of 2013, consumers continued to head to dealer showrooms in December to buy and lease more new vehicles than they did a year ago. U.S. new-vehicle sales remain resilient and are likely to increase by 14% from last year, according to the monthly forecast update from our Power Information Network® (PIN) and strategic partner LMC Automotive.

Based on sales transactions during the first 13 selling days of December, retail sales this month are anticipated to reach 1.153 million units, which is 15% higher than last December’s 1.04 million units on a selling-day adjusted basis.* This estimate translates to a seasonally adjusted annual rate (SAAR) of 12.2 million units, which is stronger than last December’s 11.3 million-unit pace, but not as strong as the 13.2 million-unit SAAR in November, 2012—which turned out to be the highest monthly retail selling rate since January 2008. Continue reading ›

U.S. October Auto Sales Remain Resilient; First 10 Months Totals Are Up

Every multi-franchise automaker in the U.S. market except for Nissan Group reported selling more new vehicles last month than in October 2011—even though Hurricane Sandy’s storm damage on the East Coast curtailed the final five days of sales in the region during the month this year.

In October, BMW, Volkswagen and Toyota Groups posted the highest double-digit sales increases from a year ago, and six of the 11 multi-franchise automakers—including the above-mentioned three—outpaced the industry’s 7% year-over-year increase. Volkswagen Group posted the best gain as sales were up 21.5% from a year ago.

Before the storm hit in the final days of the month, total (retail and fleet) sales for October had been forecast to rise 11% from a year ago. Instead, U.S. deliveries were up 7% from a year ago, reaching 1.09 million unit sales (vs. 1.02 million unit sales a year ago), which translates to a 14.2 million-unit seasonally adjusted selling rate (SAAR). That rate is up 1 million units from last October.

Retail sales in October still came in stronger than total deliveries—climbing 9.4% from last year, according to real-time transaction data and analysis from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. However, in light of the storm damage, retail deliveries were 12.2% below retail sales in September, which was an especially strong month this year. Continue reading ›

Lower Monthly Payments, Easier Financing Terms Boost New Vehicle Deals

Thomas King

More new-vehicle buyers are financing their purchases as car prices continue to rise. This year through August, well over one-half (59%) of new-vehicle buyers took out a loan, which is up from 53% in 2007, according to our Power Information Network® (PIN) retail transaction data.

Through August this year, the average monthly loan payment on a car fell to $462, which is down from 5 years ago (2007), when the average monthly payment was $483. Yet, the average new-vehicle transaction price has risen to $28,096 this year. Five years ago, PIN data recorded an average new-vehicle transaction price of $26,558. This represents an increase of almost 6%.

Leasing, which also has become more affordable as the cost of borrowing falls, accounted for more than one-fifth, or 21%, of transactions through August this year, up slightly from 20% in 2007. Our expectation is that the lease mix will be similar to current levels into 2013. However, since overall retail demand is expected to rise, so will the number of lease sales. In addition, we anticipate that fleet volumes will increase heading into 2013. Continue reading ›

U.S. Light-Vehicle Sales in September Best Since 2008

Retail light-vehicle sales during the last week of September were much stronger than expected, pushing up the month’s retail seasonally adjusted sales pace, or SAAR, to 12.4 million units—the second highest average retail pace this year, according to analysis by J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. Total sales were strong as well—highest since March 2008—and finished with a 14.9 million SAAR.

In September, retail car and light-truck deliveries climbed 16.8%* from last year to just under (2,700 units less) 1 million units At the same time, September retail totals slipped 1.5% from a strong retail performance in August, when adjusted on a selling-day basis. Yet, September’s retail SAAR was 1.9 million units stronger than in the same month of 2011.

Fleet sales declined 4.1% and accounted for only 16% of total sales in September, which was down from a 19% share of total sales a year ago. Nearly 190,000 fleet units were delivered. The fleet SAAR averaged 2.5 million units—up 600,000 units from last month, but down 100,000 units from September 2011. Continue reading ›

Hybrid and EV Sales Charge Ahead in U.S. Market

In August, buyers bought and leased more than twice as many new vehicles with alternative powertrains as they did a year ago, according to transaction data and analysis from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive.

Sales of five hybrid/electric models—including the Toyota Prius hatchback hybrid—and two plug-in hybrid EVs (PHEVs)—including the Chevy Volt—more than doubled to 25,005 unit sales vs. 12,116 a year ago. Through the first 8 months of 2012, four brands offering six models—Toyota, Chevrolet, Nissan, Honda  and Mitsubishi—delivered 187,324 vehicles with alternative hybrid/electric, extended-range electric, and pure electric powertrains, which was a surge of 76% from the same period in 2011 (106,364 unit sales). Continue reading ›