Economic growth and improved credit availability are strengthening both the near- and long-term outlook for new light-duty vehicle sales in 2010-- though improvements continue at a slow pace.
According to research firm J.D. Power and Associates, February 2010 new-vehicle retail sales are expected to increase marginally to 561,000 units compared with the same month a year ago – representing a seasonally adjusted annualized rate (SAAR) of 8 million units, compared with 7.9 million units in February 2009.
J.D. Power added that fleet sales also rebounded from the lower levels experienced one year ago, with total sales for February 2010 projected to come in at 741,500 units, up 8% from February 2009.
The firm did note that sales numbers are down from January’s figures, largely due to the Toyota recalls, but expects that drop to only be temporary.
J.D. Power added that, given stronger-than-expected 5.9% gross domestic product [GDP] growth in the fourth quarter last year, it is increasing its 2010 light-duty sales forecast to 11.7 million units (from 11.5 million units) for total sales and to 9.6 million units (from 9.5 million units) for retail sales, despite February's expected performance.
The firm also noted that, for the first quarter of 2010, vehicle production remains on track to increase by more than 1 million units from the same period in 2009. Production volume for 2010 overall is expected to increase by 24% to 10.6 million from 8.5 million in 2009.
Automakers are also continuing to invest heavily in their operations as well. For example, Ford Motor Co. is pumping $1.8 billion into powertrain engineering and facility upgrades in its North American operations to support its 2011 vehicle launches; adding 1,260 jobs as part of these investments.
Ford is also introducing nine new or upgraded powertrains in North America for its 2011 model vehicles as a result of these investments, including three just for its new 2011 F-Series Super-Duty: a 6.2-liter V-8 gasoline engine; a 6.7-liter Power Stroke Diesel; and the 6R140 heavy-duty TorqShift automatic transmission for the F-Series Super Duty.
Still, there is concern that OEM production rates may be outpacing the sales growth trend, noted Jeff Schuster, executive director of global forecasting at J.D. Power. At the beginning of February this year, vehicle inventory was at a 71-day supply, compared with 121 days in February 2009.