S&P Chief Economist, J.D. Power Executive Offer Cautious but Positive Outlooks

Two experts from Standard & Poor’s and J.D. Power offered cautiously positive outlooks for the U.S. economy and for the U.S. auto industry to some 300 auto dealers and industry participants during the recent Western Automotive Conference, sponsored by J.D. Power and the National Automobile Dealers Association (NADA).

Beth Ann Bovino, U.S. chief economist for Standard & Poor’s, said that the U.S. is in its fourth year of recovery with an average growth rate of 2%. On a global level, she cited challenges to be faced including a slowdown in China, the remaining effects of the debt crisis in the Eurozone, and spikes in global oil prices.

In addressing current conditions in the U.S., Bovino said the Fed is focusing on creating jobs and is offering incentives for businesses to invest and hire, which will lead to higher growth. She said there has been robust demand and hiring in the private sector in spite of shocks. Continue reading ›

What Dealers, OEMs Can Do to Offset Sluggish Market in India

MohitArora

Mohit Arora

A slowing economy in India is creating more pressure on the country’s auto industry. In light of dimmer economic conditions, Mohit Arora, director and country manager at J.D. Power Asia Pacific, discussed the outlook for India’s dealerships and auto sales in a column in India’s Businessworld magazine. Excerpts from the column titled “Is it All Doom and Gloom at Car Dealerships?” are highlighted in this post:

Economic Front

A slowdown in GDP growth, industrial production and a decline in the value of the rupee against the U.S. dollar have observers jittery about India’s future growth prospects. Anticipated increasing pressure on inflation from higher fuel costs also is expected to negatively impact household expenses. It’s not surprising, then, that the automotive industry is feeling the pressure, with year-over-year new-vehicle sales down in double digits as fewer consumers visit their local showroom to buy a new vehicle.

What Do Dealers Anticipate?

Recently, we asked more than 600 auto dealers in India about their business and how satisfied they were with the support they were receiving from the manufacturer. The results from the J.D. Power Asia Pacific 2013 India Dealer Satisfaction with Automotive Manufacturers Index  Study (DSWAMI) showed that one in five dealers expected to report a loss in the financial year (2012-2013), which is up from 9% in the previous year. In addition, less than one-half (44%) of dealers anticipated that they would make a profit—down from nearly two-thirds (62%) in the prior year. Continue reading ›

U.S. Auto Sales Remain Strong Due to Pent-Up Demand from Aging Fleet Owners

HumphreyJ

John Humphrey

Through the first half of April, retail new light-vehicle sales in the U.S. market remained strong enough to remain in “a healthy holding pattern” with continuing consumer demand to replace aging vehicles, according to a monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and strategic forecasting partner LMC Automotive.

Retail new-vehicle deliveries in April, which has 25 selling days vs. 24 in the same month of 2012, are anticipated to reach 1.03 million units, which is a 9% increase from 908,685 unit sales in April a year ago (on a selling-day adjusted basis). That translates to a seasonally adjusted annual rate (SAAR) of 12.1 million units, up slightly from 12.0 million units in March 2013, and 1.5 million units stronger than the 10.6 million units in April 2012.

Total new-car and light-truck sales (including retail and fleet) are forecast to rise 7% from a year ago, to 1.3 million units vs. 1.2 million units in April 2012. That represents a 15.2 million-unit SAAR, which matches the March SAAR, but is 1.1 million units stronger than the 14.1 million-unit pace in April 2012. April’s fleet share of total deliveries is projected to be a little larger than a year ago and will account for 22% of total sales. 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 ›

Global Light-Vehicle Market Grows in 2012 Despite Troubles

GlobalAutoForecasting_imageThe global light-vehicle market remained stable in the final month of 2012 and overall deliveries rose about 5.5% on a selling-day-adjusted basis. For the 2012 calendar year, world vehicle sales reached nearly 81 million units, up from 76.7 million in 2011, which represents a 5.2% improvement.

Particularly noteworthy advances were observed in the U.S. auto market, Japan and in China, while weak sales continued to play out in Western European countries. That region has been dealing with a major financial crisis, severely impacting as many as eight of 17 nations in the euro bloc.

Lower vehicle sales in Europe, which accounts for nearly as many unit sales as the U.S. market, foreshadow a likely slowdown in global expansion to between 2% and 3% in 2013 from 2012—even with China’s growth and gains in emerging markets, according to analysis from J.D. Power’s strategic partner LMC Automotive. 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 ›

November U.S. Auto Sales Strengthen Each Week this Month

John Humphrey

November is expected to turn in the highest monthly retail selling rate since January 2008, according to a monthly sales forecast update from J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. New-vehicle retail sales are projected to reach 931,900 units, which is up 14% from a year ago and translates to a seasonally adjusted annual rate (SAAR) of 12.9 million units, based on analysis of retail transaction data from the first half of the month.* That’s up from last November’s 11.7 million-unit retail pace.

Total sales (retail and fleet) will likely rise 12% from November a year ago to 1.1 million units, which is equal to a sales pace of 15.0 million units—much stronger than last November’s 13.6 million-unit pace and also ahead of the weaker 14.2-million-unit sales pace in October 2012, which was hampered by the Hurricane Sandy storm system on the East Coast. Our update expects fleet sales to hold steady below a 17% share of total sales, which is the same level as October this year, but lower than an 18% share of total sales last November.

Sales continue to grow stronger each week this month, which is good news and likely to indicate that there will be a strong finish to the month and to the 2012 calendar year. We foresee healthy sales in December, as consumers continue to recover from the effects of the hurricane and as the industry revives and leads into its year-end sales events. Continue reading ›

US Auto Sales Retain Momentum in First Weeks of January

During the first half of January,* U.S. car and light-truck sales were stronger than in the same period of January a year ago, which is good news for the industry following last year’s robust finish, according to J.D. Power’s monthly sales update based on analysis of retail transaction data collected by our Power Information Network® (PIN) with LMC Automotive.

January retail new-vehicle sales are expected to rise 6% from January 2011 and reach 681,000 units, which translates to a seasonally adjusted annual selling rate (SAAR) of 10.9 million units—well above a 10.3 million-unit pace in January 2011, but below the 11.3 million-unit pace in December 2011. Continue reading ›

October US Auto Sales Offer Stable to Strong Results

In early reports, a few multi-franchise automakers posted stellar light-vehicle sales results in the US market in October vs. a year ago, in spite of a weak economy and lower consumer confidence levels. J.D. Power predicted in mid-October that the average annual sales pace for October would come in at 13.1 million units, and total US deliveries would rise almost 11% from October 2010.

Two of three Detroit-based automakers, General Motors and Ford Motor Co., posted single-digit gains from a year ago. GM and Ford’s small year-over-year sales gains were bolstered by strong performances from crossovers and trucks. Two of the big three Japanese automakers—Toyota and Honda Groups—posted lower totals than last year, partly due to constrained inventories, although Honda, hit by a recent shortage of parts following flood damage to one of its plants in Thailand, posted nearly flat sales. Continue reading ›