New-Vehicle Sales Set to Achieve Best Month Since 2005
March 20, 2015—U.S. total new-vehicle sales in March 2015 are bouncing back from a slow February, and are expected to reach their highest levels for the month in a decade, according to a monthly sales forecast from J.D. Power and LMC Automotive.
After winter storms stymied sales in February, total new light-vehicle sales in March 2015 are expected to reach 1.5 million units, a 4 percent increase on a selling-day adjusted basis compared with March 2014. That would be the highest levels for the month since March 2005, when 1.57 million new vehicles were sold.
Similarly, new-vehicle retail sales in March 2015 are projected to reach 1.2 million units, a 4-percent increase on a selling-day adjusted basis compared with March 2014 (March 2015 has one fewer selling day than March 2014) and the highest retail sales volume for the month since March 2007 when sales hit 1.2 million.
The retail seasonally adjusted annualized selling rate (SAAR) in March is expected to be 13.6 million units, 449,000 units stronger than in March 2014 and the highest retail SAAR for the month since March 2002 (14.8 million).
"Inclement weather in February caused many consumers to delay their new-vehicle purchase until March," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "Other key industry metrics continue to demonstrate the industry's underlying strength. The average new-vehicle transaction price so far in March is $30,530, the highest level ever for the month of March."
The combination of strong sales and high transaction prices positions March to set a new record for the month for consumer spending on new vehicles at approximately $37.7 billion, according to the Power Information Network (PIN) from J.D. Power.
Humphrey notes that elevated transaction prices continue to be enabled by extended term loans. Thus far in March, extended term financing (loans of 72 months or longer) has been used in more than 35 percent of retail deliveries, on pace to set a new record for any month.