J.D. Power and Associates Reports: Retail Demand Propels Strong New-Vehicle Sales in November

WESTLAKE VILLAGE, Calif., Nov. 18, 2010 /PRNewswire/ -- New-vehicle retail sales remain strong in November and continue to provide the muscle behind the market's strength for a third straight month, 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

November new-vehicle retail sales are expected to come in at 699,700 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.0 million units—the second straight month with a selling rate above 10 million units. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"Another strong month in retail sales signifies a return of natural demand in the market," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "With the mid-term election behind us and the economy indicating stability, if not mild acceleration, consumers are returning to showrooms even without an increase in incentive levels. Currently, total incentives are down 5 percent from October."

Total Light-Vehicle Sales

Total light-vehicle sales for November are expected to come in at 867,700 units, 12 percent higher than November 2009. Fleet sales in November are expected to remain below 20 percent of total sales, with volume up less than 1 percent from one year ago. Fleet share at this level is consistent with the continued discipline in the industry and focus on the retail side of the market.

Sales Outlook

Strength in November is a positive sign, as the automotive market is expected to close out 2010 with a small rally. As a result, J.D. Power and Associates is maintaining its 2010 forecast of 9.1 million units for retail sales and 11.5 million units for total sales.

Even with a strong close to 2010, there remains a moderate level of risk with automotive sales in 2011. Therefore, J.D. Power's forecast for the year has been adjusted downward to 10.4 million units for retail sales (from 10.5 million units) and 12.8 million units for total sales (from 12.9 million units).

"It is unclear how cautious consumers will be in 2011, as unemployment is expected to remain above 9 percent and the drag on the economy from the housing market continues," said Schuster. "While the forecast for 2011 has been reduced slightly, there are signs that consumer optimism is growing, leaving room for upward momentum."

North American Production

North American production is on target to end 2010 at 11.8 million units, which is up 38 percent from 8.5 million units in 2009. Volume in the fourth quarter of 2010 is expected to be 2.9 million units, compared with 2.7 million units in 2009.

Vehicle inventory at the end of October rose by 7 percent from September to a 67-day supply—the highest level since February 2010. However, days' supply is still only 4 days higher than the inventory level at the end of October 2009 (63 days).

"The increase in vehicle production outpaced the increase in demand, but this pattern is consistent with the buildup of new model year vehicles coming off a summer selldown," said Schuster. "With November's expected performance, concerns of an inventory glut decrease, but levels will need to be monitored closely as the year balances out."

North American production is expected to grow by 7 percent in 2011 to 12.6 million units.

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/.

J.D. Power and Associates Media Relations Contacts:

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

Angela Bianchi; Troy, Mich.; (248) 312-4729; [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