Pent-up demand due to the continued replacement of an aging vehicle fleet, along with a rebound in leasing, easier access to consumer credit and long-term financing, are driving new-vehicle sales momentum this month, according to a monthly sales forecast update based on analysis from J.D. Power’s Power Information Network® (PIN) and LMC Automotive.
Our PIN retail transaction data indicates that lease penetration is at 20%, which is up from a low of 13% in 2009. In addition, 72-month loans account for nearly one-fourth of retail sales so far this month—up from 19% a year ago.
Based on sales through the first 16 selling days of the month, new-vehicle retail sales are expected to reach 857,400 units—up 5% from a year ago on a selling-day-adjusted basis.* Retail sales translated to a seasonally adjusted average rate, or SAAR, of 12.0 million units, up at least 1 million units from 10.9 million units a month ago and 11.0 million units in February 2011. Meanwhile, fleet sales in February are expected to settle down to a 19% share of the mix, compared with a stronger fleet share of 25% in January 2012.
US Light-Vehicle Sales to Rise Slightly from Last Year
Total (retail and fleet) light-vehicle sales this month are expected to reach 1.064 million units—up 3% on a selling-day-adjusted basis from February 2011. The month’s total sales translate to a SAAR of 14.0M units, slightly lower than last month’s 14.1 million-unit pace, but up 700,000 units from a 13.3 million-unit pace a year ago.
At the segment level, the J.D. Power and LMC Automotive update suggests that three light-truck segments—large pickups, midsize utilities and midsize crossovers (CUVs)— will outperform the industry with double-digit improvements from January. In addition, new product introductions in the sub-compact conventional segment—such as the Chevrolet Sonic, Fiat 500 and Scion iQ—will bolster sales in this small car category.
Financial Crisis in Europe Fails to Curtail US Auto Sales
J.D. Power and LMC Automotive analysts agree that the financial crisis in Europe is not holding back the automotive recovery in the US market, and LMC Automotive’s Jeff Schuster, senior vice president of forecasting, points out that the industry is likely to experience its best performance since 2007, and may reach full recovery in the next two years with total light-vehicle sales rising to the 16.0 million-unit level.
Projections for the 2012 calendar year have been increased to 11.4 million-unit retail light-vehicle sales, from 11.3 million units, and the forecast for total light-vehicle deliveries has been elevated to 14.0 million units from 13.8 million units.
*Percentages of change are selling-day adjusted. There are 25 selling days in February 2012 vs. 24 in February 2011.