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 ›
After a 5% gain in global light-vehicle sales to 81 million units in 2012, the world outlook for 2013 from our strategic partner LMC Automotive is for slower expansion, with global sales rising by 3% to 83 million units this year. While some large markets performed solidly in 2012—notably the United States and China—the key macroeconomic risks that prevailed during 2012 look likely to persist well into 2013 with negative implications, and an unbalanced risk profile, for Europe. Regional variations will continue this year, according to Pete Kelley, managing director of LMC Automotive.
Some forecast highlights are featured from a recent issue of China Automotive Monthly—Market Trends:
More Favorable Economic Outlook to Boost China Sales in 2013
China light -vehicle sales (including imports) rose by 6.2% to 19.1 million units in 2012 from 2011, which was higher than the annual growth rate of 4.4% in 2011 vs. 2010. This advance was largely due to the phase‐out of the pay‐back effect from booming car sales in 2009-2010, and in particular the surge of the light commercial vehicle sector. Continue reading ›
Retail new-vehicle sales in the U.S. market were robust in the first half of January, averaging a seasonally adjusted annual rate (SAAR) of 12.9 million units, which would be the highest retail pace in the month in five years and some 2.0 million units stronger than in January 2011, according to a sales update created by J.D. Power’s Power Information Network® (PIN) and LMC Automotive.
The retail sales pace, which outperforms the calendar-year forecast of 12.4 million units for 2013, seems to build on the recovery of the industry during the past two years and remains on a path to return to near pre-recession levels within the next few years. Retail sales should reach 812,600 units, which is significantly ahead of 682,171 unit sales in January 2011.
Total light-vehicle sales, which include retail and fleets, are projected to surpass 1.027 million units—up 8% on a selling-day-adjusted basis from January 2012. The fleet share is likely to account for 21% of deliveries, which is lower than 25% in 2012. This sales forecast translates to a 15.0 million-unit pace, up from 13.9 million units in January 2012. Continue reading ›
As 2012 wraps up, possibly the most important trend for the U.S. auto industry is that new-vehicle sales continue their recovery. Light-vehicle demand continues to increase. Retail sales in calendar 2012 will likely hit 11.74 million units, up from 10.3 million units in 2011. Growth is expected to continue into 2013—our retail sales forecast for next year is 12.25 million units. The forecast assumes that there is a deal reached in Washington, D.C. before the so-called “fiscal cliff” constellation of tax hikes and expenditure cuts are slated to happen at the start of 2013. Three other major trends that we see looking at our Power Information Network® (PIN) data include:
OEM Emphasis on Transaction-Price Growth
While industry sales volumes are increasing, they are still well below the levels recorded in 2004-2007, when annual retail sales were in the 13-14 million-unit range. The primary reason that the industry has not rebounded to these record sales levels is a change in focus among OEMs. Automakers now emphasize strong transaction prices in addition to sales volumes.
This change is evidenced by the record transaction prices that are being earned across the industry. For example, in early 2010, average retail transaction prices were slightly more than $27,000, while at the end of 2012, we have observed average transaction prices approaching $30,000. These strong transaction prices are helping to offset lower volumes, and are driving increased profitability for OEMs. Continue reading ›
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 ›
In less than two weeks, members of the auto industry will get together for one full day of networking, idea sharing, gaining fresh insight, and discussing key issues affecting manufacturers, suppliers, retailers and customers at our J.D. Power International Automotive Roundtable at the Wynn Hotel in Las Vegas, NV.
This year’s Roundtable, to be held on Friday, Feb. 3, includes a reception immediately following the event that is co-sponsored by the National Automobile Dealers Association (NADA). The one-day event, which precedes the annual NADA Convention and attracts industry participants from around the world, will feature insight and projections about the automotive industry from our own J.D. Power experts, in addition to perspectives from key executives representing major automotive manufacturers and dealer groups. Continue reading ›
Retail car and light-truck sales in the first half of November* were stronger than anticipated, translating to a projected retail sales pace of 11.3 million units—the highest monthly selling rate in more than three years, according to a monthly sales update based on analysis from J.D. Power’s Power Information Network® (PIN) retail transaction data and LMC Automotive. The retail sales pace outdistances last year’s retail pace by some 1.6 million units.
Projected retail sales in November (791,900 units) provides good news as calendar 2011 proceeds to a close. In fact, the improving performance of the past 3 months suggests that the current momentum, primarily driven by replacement demand and improvements in vehicle availability, is not an aberration, suggests John Humphrey, senior vice president of global automotive operations at J.D. Power. Continue reading ›
Retail new-vehicle sales in the first two weeks of May* got off to a weak start, due to several variables, including higher prices; lower incentive levels; some inventory shortages related to the Japan disaster; and gas prices reaching nearly historically high prices, based on analysis of our Power Information Network® (PIN) retail transaction data. As a result, the industry will be facing a lower sales pace, at least through the summer selling season, which puts pressure on our outlook for vehicle sales in 2011.
We do see May sales improving in the second half of the month and project the month’s retail sales to reach 858,400 units, which is 10%** higher than in May 2010, and represents a seasonally adjusted annual rate (SAAR) of 9.6 million units. Yet, even though the retail sales pace in May is nearly 1 million units stronger than it was in May 2010 (8.7 million unit SAAR), the pace is sharply lower than the 10.7 million-unit average sales pace in the first four months of 2011. As we look ahead to the close of the month, we see quite a bit riding on results during the Memorial Day weekend, which traditionally is a pretty strong selling weekend. Continue reading ›