New-Vehicle Buyers Timid During Government Shutdown


car dealer (select to view enlarged photo)

WESTLAKE VILLAGE, CA--Oct. 25, 2013: While the government shutdown constrained new-vehicle retail sales during the first half of October, the overall pace for the month remains slightly ahead of the running average for the year, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail Light-Vehicle Sales New-vehicle retail sales in October are projected to come in at 1,016,500 units, an 8 percent increase from October 2012. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles. The seasonally adjusted annualized rate (SAAR) in October is expected to be 12.8 million units, compared with the year-to-date run rate of 12.7 million units.

Retail sales during the first two weeks of October were up only 1.6 percent (selling-day adjusted), compared with October 2012, but retail sales during the third week were up 7.7 percent, compared with the same period a year ago.

Sales in the Atlantic Coastal region, which had the highest concentration of government employees impacted by the shutdown, suffered the most, down 6.5 percent through the first two weeks of October. Sales in the region bounced back when the shutdown ended, surpassing sales during the same period in 2012 by 2.5 percent.

"The government shutdown clearly had an impact on retail sales through government employees directly affected by the shutdown, vehicle shoppers involved in businesses impacted by the shutdown and its impact on consumer confidence," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "However, sales in the third week of the month strengthened relative to the first two weeks, which is evidence of vehicle buyers delaying their purchase until the shutdown was resolved."

Total Light-Vehicle Sales Total light-vehicle sales in October also are expected to increase 8 percent from October 2012. Fleet sales are expected to return to a 200,000 unit level, after 220,000 sales in September, with share of industry dropping to 17 percent from 19 percent in September. Fleet share for the full year is expected to come in below the 18 percent level.

Sales Outlook The sales outlook for 2013 remains unchanged at 15.6 million units. However, with two months of a slight pullback, retail sales are projected to come in at 12.8 million, a slight decline from the previous forecast of 12.9.

"The industry didn't escape the turmoil in Washington, but the disruption was not enough to stop the auto recovery," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Light-vehicle sales volume north of 16 million units in 2014 is well within reach; however, there is a higher level of risk that consumer confidence could be distracted again in the first quarter if, as expected, the debt ceiling gridlock returns."

North American Production Year-to-date production in North America through September is up more than 4 percent from the same period in 2012. Production in September 2013 was at 1.4 million units, a 13 percent increase from September 2012.

The lower sales pace in September, combined with higher production, has caused a slight increase in inventory levels. October started with a 63-day supply, up from 56 days at the beginning of September.

A 63-day supply represents a healthy level that is right in the middle of the 60- to 65-day supply normal range. Schuster notes that given the current selling rate for October, days supply is expected to climb further toward the mid-60-day range, but should not have a negative impact on production levels, as a small inventory buffer may help meet demand as the year closes out.

LMC Automotive has nudged up the volume outlook for 2013 North American production to 16.1 million units from 16.0 million. The overall growth rate is expected to slow slightly in 2014, with volume forecast up 3 percent to 16.5 million units. Leading the way, in terms of growth next year, are BMW, Daimler and Renault-Nissan, all with newly sourced vehicles in North America. BMW, with the X4, and Nissan, with the Murano and a full year of the Rogue, are expected to post double-digit production growth, while Daimler, with the addition of the C-Class, is expected to be up 21 percent from 2013.

Home | Buyers Guides By Make | New Car Buyers Guide | Used Car Super Search | Total New Car Costs | New Car and Truck Reviews
Automotive News | TACH-TV | Media Library | Discount Auto Parts

Copyright © 1996-2014 The Auto Channel. Contact Information, Credits, and Terms of Use. These following titles and media identification are Trademarks owned by The Auto Channel, LLC and have been in continuous use since 1987 : The Auto Channel, Auto Channel and TACH all have been in continuous use world wide since 1987, in Print, TV, Radio, Home Video, Newsletters, On-line, and other interactive media; all rights are reserved and infringement will be acted upon with force.

Privacy Statement | Size Does Matter | Media Kit | Affiliates

Send your questions, comments, and suggestions to Editor-in-Chief@theautochannel.com.

Submit Company releases or Product News stories to submit@theautochannel.com.
Place copy in body of email, NO attachments please.

To report errors and other problems with this page, please use this form.

Link to this page: http://www.theautochannel.com/

*