J.D. Power and Associates Reports: March New-Vehicle Retail Sales Rebound From Recall and Weather-Dampened February Levels

WESTLAKE VILLAGE, Calif., March 19 /PRNewswire/ -- New-vehicle buyers are returning to dealer showrooms in March, lured by incentives, after recall news and bad weather kept them away in February. As a result, March new-vehicle retail sales are projected to increase by 25 percent, compared with the same period one year ago, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 retail franchise points across the United States. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

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Retail Light-Vehicle Sales

March new-vehicle retail sales are expected to come in at 883,300 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.9 million units. This reflects a retail SAAR increase of nearly 2 million units, compared with February 2010. Compared with March 2009, retail sales are projected to increase by 2.3 million units.

"New-vehicle retail sales increased robustly during the first half of March, and are expected to remain strong throughout the remainder of the month—setting the industry recovery back on track," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "March sales could outperform projections if the pace does not level off as expected for the remainder of the month. However, there is some risk that the incentives offered by Toyota could spark an incentive war among several automakers. While this may lead to a temporary increase in sales momentum, it could also potentially slow the pace of long-term recovery."

Total Light-Vehicle Sales (including fleet sales)

Fleet sales continue to increase from historic lows in 2009 and are expected to increase by 13 percent from March 2009 to come in at 209,000 units in March 2010. Total light-vehicle sales for March are projected to come in at 1,092,000 units—an increase of 23 percent compared with one year ago.

March total SAAR is projected to reach 12.1 million units for the first time since September of 2008 (with the exception of the boost provided by the CARS program in August 2009), which reflects significant progress in the industry's recovery.

North American Production

North American production is continuing to increase, with volume in February 2010 reaching 922,000 units, up 57 percent from February 2009. For the first quarter of 2010, production is on target to reach 2.8 million units, an increase of 70 percent from the same period one year ago. Production volume for 2010 overall is expected to increase by 25 percent to 10.6 million from 8.5 million in 2009.

At the beginning of March, vehicle inventory was at a 67-day supply, compared with 101 days in March 2009.

Capacity utilization in North America has improved from 2009 due to the recovery in production levels, as well as reductions in capacity, and is forecasted to reach 61 percent in 2010, compared with 47 percent in 2009.

"Since 2006, more than 1.2 million units of excess capacity has been cut from North American production levels," said Schuster. "Capacity is now at 17.9 million units, which is still well above current and near-term production levels of 10.6 million units, suggesting that additional production cuts may be necessary as a new, leaner industry takes shape."

Industry Outlook

Despite ongoing issues with unemployment, consumer spending has been stronger than expected during the first two months of the year and the automotive market is continuing to improve. J.D. Power and Associates' 2010 forecast remains at 11.7 million units for total sales and 9.6 million units for retail sales.

"Due to improving economic conditions, downside risk appears to be subsiding," said Schuster. "However, the market remains very dynamic, and it will be critical for sales momentum to be sustained as the market heads into the spring selling season."

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction.  The company's quality and satisfaction measurements are based on responses from millions of consumers annually.  For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, Platts, Capital IQ, J.D. Power and Associates, McGraw-Hill Construction and Aviation Week. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at www.mcgraw-hill.com. 

J.D. Power and Associates Media Relations Contacts:

John Tews; Troy, Mich.; (248) 312-4119; [email protected]

Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; [email protected]

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

SOURCE J.D. Power and Associates