J.D. Power: Light-duty sales remain strong

Sales of light-duty vehicles in July are up compared to June, though they remain below the pace set earlier this year, but should continue to strengthen despite a slowdown in the overall U.S. economy, according to data compiled by J.D. Power and Associates

Sales of light-duty vehicles in July are up compared to June, though they remain below the pace set earlier this year, but should continue to strengthen despite a slowdown in the overall U.S. economy, according to data compiled by J.D. Power and Associates.

New-vehicle retail sales in the light-duty category are projected to come in at 913,900 units, representing a seasonally adjusted annualized rate (SAAR) of 9.8 million units, the firm said, while total light-vehicle sales in July are expected to come in at 1.08 million; 8% higher than the same month in 2010, representing a total SAAR of 11.9 million units.

Fleet deliveries are typically low in July and are expected to represent 16% of total sales at 174,000 units for the month, J.D. Power added.

“While July’s selling rate is slated to finish higher than June, consumers continue to face obstacles in their willingness and ability to purchase a new vehicle,” noted Jeff Schuster, J.D. Power’s executive director of global forecasting. “The ongoing debate regarding the debt ceiling and stagnant economy are creating added pressure on top of a generally weaker vehicle sales environment.”

However, he pointed out that retail light-vehicle sales in the second half of 2011 are expected to outperform the first half of the year, with the selling rate averaging 10.7 million units, up from 10.3 million during the first half of 2011. Including fleet sales, the total light-vehicle selling rate is also expected to be stronger during the second half of 2011 at 13.2 million units, up from 12.5 million during the first half of the year.

J.D. Power's 2011 retail light-vehicle forecast remains at 10.5 million units and total light-vehicle sales remains at 12.9 million units, Schuster added.

North American production through the first half of 2011 has increased 8% from the same period in 2010, with 6.4 million light vehicles produced, versus 5.9 million units in the first half of 2010, the firm noted. Disruptions from the March 2011 Japanese earthquake/tsunami disaster are easing for the Japanese automakers, as production among these companies returns to normal levels in North America.

In addition, the pace of their recovery will quicken through the second half of 2011. For 2011, North American light-vehicle production is forecasted at 12.9 million units, up 9% from 2010, J.D. Power said.

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