• Jan 31, 2010
After gathering real-time transaction data from 8,900 automotive franchisees across the U.S., J.D. Power and Associates predicts new-vehicle retail sales will have declined for January 2010 compared to one year ago. January's new-vehicle sales are expected to come in at 500,900 units, which represents a seasonally adjusted annualized rate (SAAR) of 7.9 million units. In January of 2009, the SAAR was 8.8 million units. December 2009 was a particularly strong sales month – thanks to heavy marketing and aggressive incentive programs – making it a tough act to follow. To wit:
"January is typically a weak selling month, but this month is particularly impacted by December's strong close and extra selling weekend," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "However, the sales pace has been improving as January continues, which is an encouraging sign for the recovering industry."
Not to be confused with new-vehicle retail sales, fleet sales are expected to increase significantly when compared to the same slow period last year. When fleet- and new-vehicle units are combined, the month's outlook is more promising. According to J.D. Power, total sales for January 2010 are projected at 659,000 units, up nine percent from the same month last year. Carried forward, the global marketing firm is predicting 2010 total vehicles sales at 11.5 million – and these numbers may be even higher as the industry recovers, thereby loosening credit and improving leasing availability. Check out the press release after the jump.

[Source: J.D. Power and Associates]

PRESS RELEASE

J.D. Power and Associates Reports:
New-Vehicle Retail Sales Off to a Slow Start in 2010
As January Selling Rate Pulls Back from December 2009 Rally

Favorable Inventory Levels and Recovering Demand Boost North American Production

WESTLAKE VILLAGE, Calif.: 22 January 2010 - The new-vehicle retail selling rate in January is expected to decline compared with both December 2009 and one year ago, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 franchisees across the United States.

January new-vehicle retail sales are expected to come in at 500,900 units, which represents a seasonally adjusted annualized rate (SAAR) of 7.9 million units, compared with 8.8 million units in January 2009. This month's selling rate is down from 8.9 million units in December 2009-one of the stronger sales months in 2009, in part due to robust marketing and incentive programs.

"January is typically a weak selling month, but this month is particularly impacted by December's strong close and extra selling weekend," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "However, the sales pace has been improving as January continues, which is an encouraging sign for the recovering industry."

Fleet sales are expected to increase substantially from January 2009, which marked the lowest fleet level last year. As a result, total sales for January 2010 are projected to come in at 659,000 units, up 9 percent from January 2009. The January SAAR for total light-vehicle sales is expected to increase to 10.1 million units, compared with 9.6 million units one year ago.

J.D. Power and Associates is maintaining its 2010 forecast at 11.5 million units for total sales and 9.5 million units for retail sales. However, with improved leasing availability, loosening credit and healthier economic conditions, the industry's recovery could be more pronounced.

Vehicle inventory is currently at a 53-day supply, compared with 94 days in January 2009. The improved inventory level, combined with growing demand, is leading to increases in North American vehicle production in the first quarter of 2010. Production is expected to increase by nearly 70 percent to 2.8 million units during the first three months of 2010, compared with 1.7 million units during the same period one year ago.

"While North American production remains well below historic levels, the near-term boost will provide much-needed support to the automotive supply base," said Schuster. "Year-over-year increases are expected to continue throughout 2010, resulting in a projected 2 million-unit increase, compared with 2009 levels."



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    • 1 Second Ago
  • 3 Comments
      • 4 Years Ago
      @Aznauto - Several indicators point toward 14M, and that credit is the primary (not sole) reason why it's down. Do you really think lenders alone will shrink the active size of the fleet? If so, at what point will the fleet begin growing at an 'organic' (defined for this question as 'in proportion to miles driven per year') rate? I have a good friend who believes as you do, but the jury is still out for me.

      On the article's point, though, I wonder how much of the shrink is due to 2 of the top 10 and 5 of the top 20 vehicles of 2009 being stunted by the Toyota recalls (I know not all are under recall, but not everyone does).

      It'll be interesting to see...
      • 4 Years Ago
      I look at it like this:
      - US population of potential drivers is about 180M people (18 to 65), so that's a fair proxy for the maximum number of cars in service.
      - there are currently over 250M cars on the road, and most of these are newer and functional
      - 10M cars per year seems very possible for several years, until the glut of cars winds down and the ratio of cars : drivers gets closer to 1:1