New vehicle sales expected to post biggest gain since February 2011

The new-vehicle retail sales pace in May remains strong, consistent with the pace set early in 2012, according to a monthly sales forecast developed by J.D. Power and Associates' Power Information Network (PIN) and LMC Automotive.
Jan. 1, 2020
3 min read

The new-vehicle retail sales pace in May remains strong, consistent with the pace set early in 2012, according to a monthly sales forecast developed by J.D. Power and Associates' Power Information Network (PIN) and LMC Automotive.

Like this article? Sign up to receive our weekly news blasts here.

Retail Light-Vehicle Sales

May new-vehicle retail sales are projected to come in at 1,087,000 units, which represents a seasonally adjusted annualized rate (SAAR) of 11.6 million units. Volume is expected to increase 20 percent compared with May 2011, after adjusting for the two additional selling days this month. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

"This is the largest year-over-year gain since February 2011, when sales increased 27 percent, compared with February 2010," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "The fact that we continue to see strong month-over-month results in retail sales points to the underlying strength of the recovery for the industry going forward. In light of the actions that many automakers took to lower their cost base during the recent downturn, this continued increase in volume certainly bodes well for sector profitability in the near term.”

Total Light-Vehicle Sales

Total light-vehicle sales in May are expected to come in at 1,384,000 units, which is a 21 percent increase from May 2011. Fleet volume as a percentage of total light-vehicle volume is expected to remain high in May, representing 22 percent of total sales.

North American Production

North American light-vehicle production through April this year is up nearly 22 percent, compared with 2011, as nearly 1 million additional vehicles were built in the first four months of 2012 than in the same period last year. Growth in U.S. manufacturing leads the overall North America region with a 25 percent year- to-date increase. Production in Mexico is up 19 percent and Canadian manufacturing is 14 percent higher. North American production in the second quarter is anticipated to increase by more than 20 percent from 2011, with more than 3.8 million units expected to be built. Several manufacturers have limited normal summer shutdowns this year in order to keep pace with vehicle demand and stabilize inventory throughout the summer selling season.

Vehicle inventory at the beginning of May remains stable at a 55-days supply, a slight increase from a 54-days supply in April. Car inventory remains at a below-normal level, with a 45 -days supply in early May, up from 44 days in April, as demand for cars has increased due to higher fuel prices. Truck inventory levels are also stable in May at a 67-days supply, up from a 66-days supply in April.

The robust sales pace continues to drive a stronger outlook for North American production. As a result, LMC Automotive has increased the North American production outlook for 2012 to 14.9 million units (up from 14.3 million units), which represents 14 percent growth from 13.1 million units built in 2011.

"With the increase in demand and more pronounced production recovery with the Japanese manufacturers, North American production volume for the remainder of 2012 is expected to be vigorous," said Schuster. "Risk of volume loss related the PA-12 resin issue appears to have been abated, therefore no longer constraining further growth in production volume."

About the Author

ABRN Wire Reports

These are press releases approved by our ABRN Editors
Subscribe to our Newsletters