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 ›

J.D. Power’s King Discusses U.S. Auto Market Shifts at Joint Conference

Thomas King Speaking at S&P ConferenceJ.D. Power’s Thomas King, senior director, Power Information Network® (PIN), recently shared insights on changes in new-vehicle demand in the U.S. market at the Standard & Poor’s/J.D. Power Auto Industry Hot Topics Conference in New York.

Analysts from S&P, J.D. Power, and strategic partner LMC Automotive, presented their views and analysis of the current and future state of the U.S. and global auto industry to an audience of more than 160 Wall Street analysts and reporters. Continue reading ›

Labor Day Sales Events Boost August U.S. Light-Vehicle Delivery Totals

Buyer and Dealership ManagerU.S. new light-vehicle sales in August were more robust than anticipated, mainly due to a heady retail sales finish over the Labor Day weekend. Retail sales even outperformed the accurate monthly forecast from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive, which already had projected one of the strongest sales months in six years.

There was an extra boost from holiday sales, especially on August 31 since Labor Day weekend was counted in August’s sales total as the month ended on a weekend. J.D. Power experts say they are not sure yet how much August sales will pull forward from September results. Total consumer spending on new vehicles in August was the highest on record—reaching $38.5 billion,—mainly due to strong transaction prices and higher sales, according to J.D. Power analysis.

Retail sales in August climbed 17.7% above retail totals in the same month of 2012. The final week of August sales totals (August 26 – Sept. 3) captured nearly 35% of the month’s retail sales volume, according to Dave Cutting, senior manager of North American Forecasting at LMC Automotive. Retail deliveries totaled 1.34 million units and the seasonally adjusted selling pace (SAAR) of 13.8 million was the highest since 2006. Continue reading ›

U.S. Auto Market Reaps Double-Digit Gain in June; Best Monthly Pace Since 2007

Car buyer gets keys from DealerAutomakers in the U.S. market finished the month of June with new-vehicle total sales increasing 13.5% (on a selling-day adjusted basis*) to 1.40 million units from 1.28 million units in the same month in 2012, according to analysis from J.D. Power’s Power Information Network® (PIN) and our strategic partner LMC Automotive. The selling pace in June was the strongest in six years and outperformed most forecasts.

Through the first six months of 2013, total new-vehicle deliveries also increased, but not by as much as the June figure; YTD sales were up 8.4%, to 7.82 million unit sales from 7.26 million in the same six-month period a year ago. Trucks outperformed cars in the first half and gained 1.80 percentage points of share from a year ago. The Detroit-based automakers also captured a larger share of the U.S. auto market in the first half—46.1% vs. 45.2% in 2012.

In June, the seasonally adjusted annual selling rate (SAAR) for retail and fleet sales averaged 15.9 million units—the strongest rate since 2007. The year-ago total light-vehicle SAAR was a much weaker 14.4 million units. Continue reading ›

May U.S. Auto Sales Finish the Month on a Higher Note than Anticipated

buyer looking at carNew car and light-truck sales in May finished the month higher than projected, according to analysis from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. The better-than-expected performance was propelled by a strong retail market especially during the last four days of the month—which included the Memorial Day weekend—and accounted for 25% of May’s retail totals.

Automakers in the U.S. market sold 8.2% more new vehicles than in the same month of 2012. Both months in both years had the same number of selling days. The seasonally adjusted annual selling rate (SAAR) averaged more than 15.2 million units for total sales (retail and fleet).

Fleet sales were not as strong as retail deliveries. May retail sales were up 10% and totaled 1.177 million units, which translated to a 12.7 million-unit SAAR—more than 1 million units stronger than the retail pace a year ago. May’s retail SAAR was the strongest in five years.

PIN and LMC Automotive also reported that nearly all manufacturers posted year-over-year retail sales increases. Through the first 5 months of 2013, total sales were up 7.3% from the total in the same time period of 2012. Continue reading ›

J.D. Power’s O’Neill Sees Industry Revival with Rosier Sales in the U.S. Market

AutoForum- Fin O'Neill 1New-vehicle sales in the U.S. market have already recovered by more than 10% annually since 2010, Finbarr O’Neill, president of J.D. Power and Associates, said in remarks this week at the company’s 2013 Automotive Forum. The conference was sponsored with the National Automobile Dealers Association (NADA) at the Grand Hyatt Hotel in New York City before the New York International Auto Show* press briefings this week.

Total U.S. sales of cars and light trucks this year should surpass 15.3 million units, which is up from 14.4 million unit sales in 2012, O’Neill confirmed. He also said that new-vehicle sales are projected to surpass 16.4 million units by 2015.

O’Neill also told industry participants at the conference that retail light-vehicle sales are solid and increasing while the daily rental market and fleet sales are well under control, which is very different from the mid-2000 period, when manufacturers relied too heavily on discounts and fleets. At the same time, he said that J.D. Power’s data finds that the average transaction price of a new vehicle has increased by $3,500 since that period. Credit is looser, and leasing has risen to 23% of the sales mix, based on data collected by J.D. Power’s Power Information Network® (PIN). Continue reading ›

February U.S. Sales: Strong Retail Finish and Major Rise in Leasing

A strong retail sales finish at the end of the month pushed up February total light-vehicle (retail and fleet) sales in the U.S. market by 8.1% (selling-day adjusted) to nearly 1.2  million units.

Robust February sales translated to a 15.34 million-unit seasonally adjusted annual sales rate (SAAR), according to analysis by our Power Information Network® (PIN) and strategic partner LMC Automotive. February was the fourth consecutive month with a SAAR of at least 15.2 million-units.

Retail new-vehicle sales rose 8.9% from a year ago to slightly more than 928,000 units, which translated to a 12.1 million SAAR that was the strongest start of a year since the beginning of 2008. In addition, although fleet sales accounted for a slightly lower portion of total sales than a year ago—22.1% vs. 22.6% in 2012—fleet deliveries were up 5.3% when adjusted for one less selling day this year. Continue reading ›

February U.S. Auto Sales Remain Strong with Robust 13.1 Million-Unit Pace

2012 WAC Humphrey-27-MNew-vehicle sales are expected to remain resilient through the rest of February even though the retail selling rate is weaker than it was in January of this year, according to the monthly sales forecast update from our Power Information Network® (PIN) and LMC Automotive. The forecast is based on analysis of transaction data during the first 14 selling days of the month.

Retail light-vehicle sales this month are projected to reach 931,100 units, which would be 9% higher than in February 2012 and would translate to a seasonally adjusted annual rate (SAAR) of 12.1 million units, up from last February’s 11.7 million unit pace, but weaker than the 13.1 million-unit retail pace in January 2013.

Total light-vehicle sales (retail and fleet) this month are estimated to reach 1.176 million units—up 7% from deliveries in February 2012 on a selling-day-adjusted basis.* Fleet deliveries are expected to remain at the same level as in January—accounting for 21% of the sales mix. The total light-vehicle SAAR is projected to reach 15.2 million units, which is the fourth straight month at or above 15.2 million units. Continue reading ›

A Long Runway for Growth in China and Some Notable Trends

Geoff Broderick

In the coming scramble to win sales in the Tier 2-4 markets and earn profits in China, there is the temptation for OEMs to invest heavily in production, which can result in overcapacity. Discipline must be maintained in China or history will repeat itself—as illustrated by the imbalance of supply and demand in the U.S. market during the past decade. There is likely still more consolidation to come in the global auto market, but there is room for the smart players with solid business and product plans.

In the past five years, the combined vehicle sales market share of the emerging countries—including China and India—grew from less than 20% of the world’s total, to more than 50%. Among all emerging markets, China has one of the longest runways for continued growth based on its low penetration rate (vehicles per 1,000 people), in addition to a growing per capita income and rising disposable income. There also is a real opportunity for a steep takeoff, especially in China’s Tier 2 and 3 urban markets.

China Remains a Pillar in the Global Auto Industry

By 2018, China, the United States, India, Brazil and Russia will be the world’s five largest auto markets in terms of light-vehicle sales, with China as the far-and-away frontrunner at almost double the sales of the United States (30-35 million units vs. 17 million units). Japan, followed by Germany, the UK, Italy and France will round out the 10 largest markets, according to J.D. Power and LMC Automotive Forecasting.*

With closely aligned global supply and demand coupled with improved macroeconomic conditions—albeit slower for Europe—and significant new product introductions and an improvement in available credit—at least in the U.S. market—global sales, led by China (32.9 million unit sales), will boom by 2018 to slightly less than 114 million units.Although China will continue to see an increase in discretionary income, as well as much sales growth fueled from a further penetration of financing and the introduction of leasing, there will likely be intense competition to gain share in Tier 2 and Tier 3 markets. Continue reading ›

Robust Retail and Fleet Closing Boosts US Auto Sales in February

Overall February new-vehicle sales were more robust than expected, due to strong closing retail sales and higher fleet deliveries than projected, according to analysis from J.D. Power’s Power Information Network® (PIN) and LMC Automotive.*

Retail sales in February reached nearly 888,000 units—8.5% higher than totals in the same month last year, and 25% stronger than in January this year (selling-day adjusted). The seasonally adjusted annual sales rate, or SAAR, for the month was 12.4 million units, which was 1.4 million units higher than February last year, and 1.5 million units stronger than in January 2012.

February fleet sales also improved more than anticipated, climbing nearly 21% from a year ago, and were nearly 9% higher than in the first month this year, although the fleet SAAR was down from January 2012. Fleet sales accounted for 22.6% of total sales in February. Continue reading ›