J.D. Power and LMC Automotive Report: Summer Is Heating Up New-Vehicle Sales and Fueling Record Consumer Spending

WESTLAKE VILLAGE, Calif., July 24, 2014 /PRNewswire/ -- Total and retail light-vehicle sales in July 2014 are expected to reach their highest levels for the month since 2006, reflecting continuing strength in the market since spring, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

For the sixth consecutive month, the retail seasonally adjusted annualized rate (SAAR) in July 2014 is demonstrating year-over-year growth and is expected to produce the second-highest retail SAAR of 2014.

Retail Light-Vehicle Sales

The SAAR for retail sales in July is expected to be 13.8 million units, an increase of 600,000 vehicles, compared to July 2013, and the second highest so far in 2014 behind 14.1 million units in May. New-vehicle retail sales in July 2014 are projected to reach 1.2 million units, a 5 percent increase on a selling-day adjusted basis from July 2013 (which had one fewer selling day, compared to July 2014). Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

New-vehicle retail transaction prices in July 2014 are more than $29,000, the highest level ever for the month of July.

"The industry continues to demonstrate healthy growth, not just with retail-sales volume, but also with transaction prices," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "The combination of high transaction prices and strong retail-sales volume is expected to result in consumers spending more than $36 billion on new vehicles in July. That would be the highest for the month of July since 2005 and an increase of $3 billion from July 2013."

Total Light-Vehicle Sales

Total light-vehicle sales in July 2014 are expected to hit 1.4 million units, a 5 percent increase from July 2013. After stronger-than-expected fleet volume in June, fleet sales in July are expected to reach 191,000 units, or 13 percent of total light-vehicle sales, consistent with the level a year ago.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

¹Figures cited for July 2014 are forecasted based on the first 16 selling days of the month.

²The percentage change is adjusted based on the number of selling days in the month (26 days in July 2014 vs. 25 days in July 2013).

Sales Outlook

With a sales pace for the remainder of the year projected to average 16.5 million units—similar to the levels in March through July—LMC Automotive is increasing its overall outlook for auto sales in 2014. Retail light-vehicle sales are forecasted to reach 13.5 million units, up from the previous forecast of 13.4 million, and total light-vehicle sales are projected at 16.3 million units, up from 16.2 million.

Vehicles in the premium segments are expected to outpace those in non-premium segments as smaller, more affordable cars and SUVs join the ranks of several premium brands in 2014. Specifically, the small premium car segment is expected to post the strongest year-over-year growth rate with volume reaching nearly 80,000 units, doubling 2013 sales.

"The automotive industry recovery in the United States, which has had two upward revisions in the last two months, remains ahead of that of the U.S. economy, which has been revised down to less than 2 percent for 2014," said Jeff Schuster, senior vice president of forecasting at LMC Automotive.  "Further upward momentum in light-vehicles sales remains a strong possibility if the remainder of the year keeps pace with recent months and the expected improvement level in the overall economy is realized."

North American Production

North American light-vehicle production finished the second quarter with strong June output of more than 1.4 million vehicles. As a result, second quarter volume hit 4.3 million vehicles, a 3 percent jump from the first quarter of 2014 and more than 1 percent above the second quarter of 2013.

Even with the strong second-quarter sales and production, manufacturers have managed inventory levels with days' supply at a 60-day level in May and June. Healthy inventory levels, coupled with a more positive outlook for local and export demand, lends to a more favorable North American production outlook for the second half of the year. Given this, LMC Automotive has increased its North American production outlook for 2014 by 200,000 units to 16.8 million vehicles, a 600,000-unit increase from 2013.

About J.D. Power

J.D. Power is a global marketing information services company providing 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. Headquartered in Westlake Village, Calif., J.D. Power has offices in North/South America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit www.JDPower.com. J.D. Power is a business unit of McGraw Hill Financial.

About McGraw Hill Financial 

McGraw Hill Financial is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 29 countries. Additional information is available at www.mhfi.com.

About LMC Automotive

LMC Automotive is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC's global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has locations in the United States, the UK, France, Germany, China Japan and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector.  For more information please visit www.lmc-auto.com.

Media Relations Contacts
John Tews; J.D. Power; Troy, Mich.; 248-680-6218; [email protected] 
Emmie Littlejohn; LMC Automotive; Troy, Mich.; 248-817-2100; [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 or LMC Automotive. www.jdpower.com/corporate www.lmc-auto.com

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SOURCE J.D. Power