J.D. Power and Associates Reports: April New-Vehicle Retail Sales Maintain Positive Trend After March Rebound

WESTLAKE VILLAGE, Calif., April 22 /PRNewswire/ -- Building on the momentum from last month, April's retail selling rate is expected to improve slightly, supported by increased shopping early in the month and incentive programs, 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.

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Retail Light-Vehicle Sales

April new-vehicle retail sales are expected to come in at 804,200 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.8 million units. Compared with April 2009, retail sales are projected to increase by 22 percent in April 2010 and the selling rate is expected to increase by 1.8 million units. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"While new-vehicle retail sales in April are benefitting from the continuation of March's incentive programs, average incentives per vehicle are substantially lower, at $2,800, compared with $3,400 one year ago," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "Compared with March, incentives are down by approximately $200, which suggests that the likelihood of an outright incentive war is now lower. This decline in incentives, due to a lower percentage of previous-year models in inventory this year, and the upturn in volume from last April have created a healthier environment -- which is consistent with the improved first-quarter financials being reported."

Total Light-Vehicle Sales

Fleet sales are expected to pull back slightly from the strong pace in the first quarter of 2010, but remain significantly higher than one year ago. Fleet volume is forecasted to total 205,000 units for the month -- up 28 percent from April 2009. Total light-vehicle sales for April are projected to come in at 1,008,800 units -- an increase of 23 percent, compared with one year ago.

April's total SAAR is projected to come in at 11.5 million units, down slightly from March, which reflects a normalization in the fleet mix to 20 percent from higher levels earlier this year.

North American Production

Production in North America continues an upward trend from low levels last year, with volume in March coming in at 1,084,000 units -- 60 percent higher than one year ago. Production in the first quarter of 2010 ended at nearly 2.9 million units -- 71 percent higher than the same period last year.

Looking forward, the second quarter of 2010 is projected to be up 56 percent, compared with last year, with volume at 2.8 million units. Inventory was at a 53-day supply at the beginning of April -- once again less than the industry norm of a 60-day supply.

"The concern that the increase in production in the first quarter would outpace the selling rate -- and create an inventory glut -- has subsided," said Schuster.

As a result of low inventory and a robust selling rate, J.D. Power and Associates is increasing its North American production forecast for 2010 by 3 percent to 11.0 million units. This represents an increase of nearly 30 percent from 8.5 million units in 2009.

With the increase in production, capacity utilization in North America is expected to improve to 63 percent in 2010 from 47 percent in 2009.

Sales Outlook

While the sales pace remains stronger than at the start of the year, the economy is in an uncharacteristically slow recovery, which results in continued mixed signals. In addition, the manufacturing sector, including the auto industry, is still rebuilding diminished inventory levels. Given these offsetting factors, J.D. Power and Associates' sales forecast for 2010 remains at 11.7 million units for total sales and 9.6 million units for retail sales.

"Consumer confidence has recently picked up, but it remains low, due in part to an unemployment level still at 9.7 percent," said Schuster. "However, the outlook is improved from where it was at the end of 2009, and the industry is now able to focus on moving forward, rather than worrying about surviving."

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 global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.  

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