J.D. Power Expert Profiles U.S. Auto Market Sales Trends

 J.D. Power’s Deirdre Borrego, vice president, U.S. Client Services, spoke to industry participants at the October J.D. Power Automotive Marketing Roundtable in Las Vegas, NV. about the U.S. auto market’s recovery and the fundamentals in the market that are driving strong demand.

Highlights from her talk include analysis from the Power Information Network® (PIN) and J.D. Power’s strategic partner LMC Automotive:

• Retail sales to individual consumers in 2013 are expected to reach 12.8 million units which is back to pre-recession levels.

• The real story isn’t just about sales growth. It’s also about transaction price growth. We’ve seen exceptional performance with prices (consumer facing prices net incentives) increasing by about $3,000. Continue reading ›

Sales Growth in the Philippines May Hinder New-Vehicle Sales Satisfaction

Mohit Arora

Mohit Arora

Despite the positive news of strong first-half new-vehicle sales gains in the Philippines—one of Southeast Asia’s smaller automotive markets—overall satisfaction with the new-vehicle purchase experience has declined by nine points from 2012, to 846 (on a 1,000-point scale), according to the 2013 Philippines Sales Satisfaction Index (SSI) Study.

All factors measured in the study post lower index scores than in 2012 with the most notable dip being in the salesperson factor. Continue reading ›

Will Momentum in U.S. Auto Market Continue?


John Humphrey

On balance, J.D. Power is optimistic about the auto market in the United States, John Humphrey, senior vice president, global automotive, told participants at the recent J.D. Power 2013 International Automotive Roundtable in Orlando, FL, that was co-sponsored with NADA. The industry is benefitting right now from an older fleet and pent-up demand that will continue to bolster the market for the next 3-4 years.

The rebound in the U.S. market is also being aided by a recovery in the housing sector, although this is still in its nascent state. Some risks to the U.S. recovery include the spread of fear due to the Euro debt crisis—whether real or psychological—and whether the United States has truly resolved its own fiscal crisis, or merely delayed it. In addition, geo-political risks in the Middle East, East Asia and North Africa need to be monitored. 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 ›

U.S. Dealer Satisfaction with Financing Improves Across the Board

Dealer satisfaction with automotive lenders in the U.S. market has risen across all four areas measured in the J.D. Power and Associates 2012 U.S. Dealer Financing Satisfaction Study,SM  with dramatic improvements from last year in satisfaction with the sub-prime retail credit* area.

In addition, overall dealer satisfaction with prime retail credit lenders averages 885 (on a 1,000-point scale), which is an increase of 23 index points from 2011. Retail leasing satisfaction is 891, up 14 points from 2011, and floor planning satisfaction is 913, up 10 points.

Among lenders, BMW Financial Services earns the top ranking and highest satisfaction index score in three of the four categories measured. In the prime retail credit category, BMW’s captive finance arm advances in all three factors evaluated and earns a score of 963. Following BMW Financial Services in the prime retail credit rankings are Alphera Financial Services (959)* and Mercedes-Benz Financial Services (948), respectively. Continue reading ›

Easier Credit Primes July U.S. Double-Digit Retail Sales Rise

John Humphrey

Retail sales in the U.S. auto market got off to a fast start in July. While they’ve slowed as the month has progressed, retail sales in the first 16 selling days are still up 15.1% from a year ago, and July could post the second-strongest retail sales growth rate for the year, according to a monthly sales update developed by J.D. Power’s Power Information Network® (PIN) and LMC Automotive.* Fleet sales are expected to be slightly lower than in other months of the year.

Total light-vehicle sales (retail and fleet) remain stable, with volume in July expected to reach 1.168 million units, which is 20% higher than a year ago on a selling-day-adjusted basis.** That translates to a 14.1 million-unit seasonally adjusted selling rate (SAAR), which matches last month’s SAAR and is significantly stronger than the 12.2 million unit pace in July 2011. Typically, July is a slower month for fleet deliveries, which so far account for 17% of the mix, but is still stronger than the historical July average fleet percentage of 15%. Continue reading ›

May U.S. Sales: Bolstered by Toyota and Honda Delivery Gains

The strength of new car and light-truck sales during May helped offset some concern about a slowing U.S. economy. There is still pent-up demand in the U.S. market as vehicle owners replace their aging cars and trucks, while an easing in credit makes it easier to finance long-term loans, which helps drive sales growth, according to analysis from J.D. Power’s Power Information Network® (PIN) and LMC Automotive.*

In May, total light-vehicle sales reached nearly 1.335 million units, up 16% from the same month a year ago (on a selling-day adjusted basis).** May’s seasonally adjusted annual sales pace (SAAR) averaged only 13.8 million units, which was below April’s 14.4 million-unit pace, but better than last May’s 11.7 million-unit pace.

The sales gains in May were led by Japanese automakers’ year-over-year double-digit increases, which were signs of a full recovery from last year, when these automakers were hampered by production setbacks in Japan following the March 11 earthquake and tsunami in that country. Continue reading ›

Small-Car Sales Rise Driven by Shift in Demand Since Recession

Mike VanNieuwkuyk

Small-car sales in the U.S. market are up by nearly 102,000 units in the first quarter of 2012 vs. the same period a year ago, based on our research. The increase in small-car sales, especially sub-compact deliveries, during the first quarter, may be a direct effect of several key market drivers coming together. Manufacturers’ advances in powertrain technology in addition to automakers enhancing feature content in smaller vehicles have appealed to consumers’ shifting needs. Continue reading ›

Higher Gas Prices, Easier Credit Drives Shift to Smaller Vehicles

Tim Dunne

While light-vehicle sales have been strong in the first quarter of 2012, rising gasoline prices—which averaged $3.92 nationwide at the end of March (according to AAA’s Daily Fuel Gauge Report)—have convinced many consumers to purchase smaller, more fuel-efficient vehicles.

Through the first two months of the year, sales of sub-compact and compact passenger cars have accounted for approximately 25% of all retail sales. Sales of sub-compact vehicles have increased the most, up more than 35% in the first two months of 2012, compared to the same period in 2011.

Yesterday’s sales update with March delivery numbers confirms the trend since sub-compact vehicle sales soared 36.3% and total U.S. new light-vehicle sales reached 1.4 million units, according to LMC Automotive, which is the highest monthly total since 2008, based on analysis from our Power Information Network® (PIN) and LMC Automotive.*

J.D. Power’s John Humphrey, senior vice president of global automotive operations, suggests that higher vehicle sales are obviously welcome news for the U.S. automotive industry and general economy, but he points out that automakers are going to have to closely monitor shifts in segment demand and build accordingly. Continue reading ›

May Captive Penetration Dips; Lower Interest Rates Prevail

Grace Hamulic

Slightly more than two-thirds (67.4%) of new-vehicle transactions for all brands in May were financed through automaker captive finance arms—which was down more than 3 percentage points from 70.5% of new-vehicle deals in May 2010, according to our Power Information Network® (PIN) retail transaction data. In addition, a much higher percentage of new-vehicle buyers or lessees received APRs below 5% this year vs. the same month last year, up to 73.7% from 67.4%.

In light of the current inventory shortage of vehicles related to the effects of the earthquake and tsunami on production in Japan, we’re starting to see its impact on trade-ins. Compared with a year ago, the percentage of buyers and lessees with a trade-in on a new vehicle who have negative equity has declined to 21.8% from 24.5%. In addition, more than one-half (51%) of new-vehicle deals in May included a trade-in, which is up from 47.4% of transactions a year ago. Continue reading ›