J.D. Power and Associates Reports: January New-Vehicle Retail Sales Set Tone for Continued Recovery

WESTLAKE VILLAGE, Calif., Jan. 21, 2011 /PRNewswire/ -- January new-vehicle retail sales are starting the year ahead of expectations, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 retail franchisees throughout the United States.

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Retail Light-Vehicle Sales

January new-vehicle retail sales are expected to come in at 632,100 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.0 million units, nearly 2 million units higher than January 2010. January retail volume is expected to be up 23 percent from one year ago. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"While the January selling rate reflects a decline from the strong rate in December, the month of January typically experiences a much more pronounced pullback in sales," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "For three of the past four months, sales have been above a 10-million-unit SAAR, and buyers have returned to showrooms without the crutch of high incentives. This signals stability and strength of natural demand."

Total Light-Vehicle Sales

Total light-vehicle sales for January are expected to come in at 794,500 units, which is 14 percent higher than January 2010. Fleet sales are projected to account for 20 percent of total sales, with volume at 160,000 units.

Sales Outlook

Based on the growing recovery momentum, J.D. Power and Associates has increased its retail sales forecast for 2011 to 10.5 million units (from 10.4 million units). In addition, the forecast for total light-vehicle sales in 2011 has also been revised upward to 13.0 million units (from 12.8 million units).

"Optimism is increasing for the auto industry following a stronger outlook for the economy," said Schuster. "GDP growth is expected to be in the 3 percent to 3.2 percent range for 2011. As the macro drivers continue to improve and credit availability increases, further upside potential remains."

North American Production

At the close of 2010, North American production volume was nearly 40 percent higher than 2009, at 11.8 million vehicles. Production levels in 2011 are expected to continue to recover, but not at the same pace as experienced in 2010, as production continues to be well managed to demand.

Production volume in 2011 is projected at 12.6 million units, an increase of 7 percent from 2010. The quarterly pattern is expected to be more balanced, with each quarter accounting for approximately one-fourth of the annual volume. In the first quarter, production is forecasted to be 3.2 million units—an increase of 12 percent from the same period in 2010. Several manufacturers have high-profile vehicles starting volume production in the first quarter, including the Ford Focus, Chrysler 300 and Honda Civic.

Vehicle inventory at the beginning of January 2011 fell to 2.3 million units, from 2.4 million units at the beginning of December 2010. Days' supply decreased to 55 days in January—down from 67 days last month when inventory was built up for the strong close to 2010. Currently, car inventory is outpacing truck inventory at a 59-day supply, compared with a 52-day supply.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. 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