Healthy Retail Sales in June Bode Well for Summer Selling Season

John Humphrey

We’re seeing healthy retail sales growth in June as we head into the summer selling season, and as automakers change over to the 2013 model-year vehicles. Through the first 14 days of June, retail car and light-truck sales in the U.S. market are approaching a 12 million-unit sales pace—the strongest pace since February, according to our monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and LMC Automotive.*

Many major manufacturers are posting year-over-year retail sales gains this month, while maintaining strong new-vehicle prices. Although average incentive levels are up 9% from a year ago, incentives are down 5% from May. All indicators point toward an industry that continues to get healthy.

Retail light-vehicle sales in the U.S. during June are expected to reach 994,800 units, which translates to an average annual selling rate (SAAR) of 11.9 million units—up from last month’s 11.4 million-unit pace and considerably stronger than a year ago, when the sales rate averaged just 9.5 million units. Retail sales volume is anticipated to rise 15% from June 2011, when selling-day-adjusted.** Continue reading ›

Luxury Brand Competition gets Tougher in China’s Auto Market

Tim Dunne

Luxury brand automakers and dealers operating in China—who discovered their own metaphorical gold mine in the country’s automotive market these past few years—may be starting to find mining their mother lode has become more difficult.

According to LMC Automotive*, sales of luxury vehicles in China have, on a percentage basis, grown faster than the total market in China during the past few years, with 2011’s luxury-vehicle sales totaling nearly 600,000 vehicles, up 30% compared to a year earlier (and much higher than the total industry growth rate of 10% in 2011). A booming economy, rapid individual wealth creation, and a relative dearth of luxury-vehicle inventory from which to choose have created an enviable vehicle seller’s market in China. Dealer gross profit margins on a single vehicle frequently range from US$10,000-US$30,000, according to J.D. Power research. Continue reading ›

US Auto Market Experiences Solid Ending To a Good Sales Year

The US auto market finished 2011 on a robust note in spite of concerns about both the domestic and global economies, as well as significant setbacks to production and inventory levels for two major Japanese automakers following the devastating March 11 earthquake and tsunami in Japan.

Nearly 10% more new cars and light trucks were sold in the US market during the past year in comparison to 2010—12.75 million unit sales in 2011 vs. 11.56 million unit sales in 2010. The final (retail and fleet) sales tally was only slightly stronger than projected by J.D. Power’s Power Information Network® (PIN) and LMC Automotive a few weeks ago in their monthly forecast. Continue reading ›

US July Retail Sales Strengthen, but Remain Below Earlier Pace

Jeff Schuster

The best way to characterize retail light-vehicle sales performance in the US market for July is “good but not great.” While July’s selling rate is slated to finish higher than June’s pace, consumers continue to face obstacles in their willingness and ability to purchase a new vehicle. The ongoing debate regarding the debt ceiling and a sluggish economy are creating added pressure on top of a generally weaker vehicle sales environment.

Month-to-date retail deliveries in July are more robust than in the past 2 months, but remain below the 10.7 million-unit pace that we expect for the second half of the year, based on analysis of our Power Information Network® (PIN) retail transaction data collected in the first 13 days of July.

Retail light-vehicle sales in July are set to reach 913,900 units, which represents a seasonally adjusted annual selling pace (SAAR) of 9.8 million unit sales. That’s an improvement from June’s 9.3 million-unit SAAR and also better than a 9.2 million-unit rate a year ago, in July 2010. Continue reading ›

China’s Road to an Economy of Consumer Consumption

A simple policy decision made a decade ago in China aimed at giving the country’s workers more leisure time could serve as a blueprint for transitioning China’s economy from investment- and export-based, to a more consumption-driven economy, according to Tim Dunne, director of global automotive coordination at J.D. Power and Associates. He discusses the . . . Continue Reading China’s Road to an Economy of Consumer Consumption