Data tracked by consulting firms J.D. Power and Associates and LMC Automotive indicate that the pace of new-vehicle retail sales this April remains in what the firms describe as a “healthy holding pattern” in part as buyers continue to replace aging vehicles.
The companies said new-vehicle retail sales in April are projected to come in at just over 1.02 million units, which represent a seasonally adjusted annualized rate (SAAR) of 12.1 million units – keeping the rate stable at or above 12 million units for a third consecutive month.
One reason new vehicle sales may be reaching a plateau is because sticker pricing increased significantly. Date tracked by J.D. Power and LMC indicates that when comparing year-to-date data for 2013 with the same period in 2012, consumer-facing transaction prices are up 3.1% – translating into an extra $13.2 billion spent on new vehicles through the first 4 months of this year.
John Humphrey, J.D. Power’s senior VP for its global automotive practice, said the average price of used vehicles sold at franchised dealerships is also on the upswing, rising 3.8% year-to-date in 2013 compared to 2012.
"The strong used-vehicle prices we're seeing are supporting new-vehicle demand and are reflective of the general pricing discipline being exhibited by new-vehicle manufacturers," he added.
Both firms noted that total light-vehicle sales in April 2013 are projected to exceed 1.31 million units, a 7% increase from April 2012, while the selling rate is expected to remain above 15 million units for the sixth consecutive month.
Also, J.D. Power and LMC both believe the outlook for vehicle sales in 2013 continues to improve, with LMC raising its 2013 U.S. forecast for total light-vehicle sales to 15.4 million units for 2013, up from from 15.3 million units.
"The irrepressible buying behavior of consumers is driving auto sales growth in 2013, as consumer spending remains remarkably stronger than the economy suggests it should be," said Jeff Schuster, LMC’s senior VP of forecasting. "If the current favorable trend in the stock markets and housing continues throughout the year, the automotive market may be poised for a breakthrough performance."
He added that North American light-vehicle production in the first quarter of 2013 is up just 1%, compared with the same period in 2012, leaving the firm’s forecast for North American production unchanged at 15.9 million units for 2013 – an increase of 3% from 2012.
Year-over-year production in the U.S. is leading the region, with a 3% increase fueled by Ford, Nissan and Volkswagen, LMC noted. Production volume in Mexico is up 2%, while Canadian vehicle production in the first quarter is down by 9%, as all manufacturers – with the exception of Ford – reporting lower production volume in the first quarter of 2013 than in the same period of 2012.
