September New Light-Vehicle Sales Up 5% Year-over-Year; Full-Year Forecast Raised to 16.4 Million Units

WESTLAKE VILLAGE, CA -- Sept. 25, 2014: New light-vehicle sales are showing no signs of slowing, with sales in September demonstrating continued strength with solid year-over-year growth, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail Light-Vehicle Sales New-vehicle retail sales in September 2014 are projected to come in at 1.0 million units, a 94,000-unit increase from September 2013 and 6 percent growth on a selling-day adjusted basis (September 2014 has 24 selling days, compared with 23 in September 2013). The retail seasonally adjusted annualized rate (SAAR) in September is expected to be 13.5 million units—which is 1.2 million units more than in September 2013—marking the seventh consecutive month in which the SAAR has exceeded 13 million units. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

The strong sales pace in September is noteworthy as it follows an exceptionally strong August when retail sales reached 1,378,588.

"Vehicle sales typically fall sharply immediately following the Labor Day holiday before recovering later in the month, but the decline this September has been smaller than in prior years," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "While the strong sales pace is an indicator of the health of the industry, it is being complemented by record transaction prices for the month of September."

The average new-vehicle retail transaction price in September is $30,100, the highest ever for the month and exceeding September 2013 by nearly $450. J.D. Power expects consumer spending on new vehicles (retail sales multiplied by the average transaction price) to exceed $30 billion in September, the highest level for the month of September since 2004.

Total Light-Vehicle Sales Total light-vehicle sales in September 2014 are expected to reach 1.25 million units, a 5 percent increase from September 2013 (on a selling-day adjusted basis). Following two consecutive months of market share below 15 percent, fleet sales share of total light-vehicle sales is expected to rebound to 19 percent in September 2014, the same level as in September 2013.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

1Figures cited for September 2014 are forecasted based on the first 16 selling days of the month. 2The percentage change is adjusted based on the number of selling days in the month (24 days in September 2014 vs. 23 days in September 2013).

Sales Outlook LMC Automotive has increased its 2014 U.S. new-vehicle retail sales forecast to 13.6 million units from its previous expectations of 13.5 million units and has bumped up its total light-vehicle sales forecast to 16.4 million units from 16.3 million units.

"The strength in automotive sales is undeniable, as August sales performance was well above expectations and there is no evidence of a payback in September, suggesting that the auto recovery still has some legs," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "On the heels of another increase in the 2014 expected volume, 2015 is expected to hit 16.7 million units with more upside potential than downside risk."

North American Production North American production volume in August 2014 increased less than 1 percent from August 2013, the lowest year-over-year increase since April 2014. The slowdown in production in August followed strong production in July, when volume was up more than 16 percent from 2013.

Through August 2014, production volume has increased 4 percent, compared with the same period in 2013, with stronger demand, an increase in local sourcing and greater export volume the main drivers of this higher output. Mexico manufacturing growth is outperforming the rest of North America, with a 6 percent year-to-date increase. Production in the United States has increased 5 percent, while Canadian manufacturing is down 4 percent.

LMC Automotive expects North American production in 2014 to reach 16.8 million units—a 4 percent increase from 2013—and 2015 North American production to hit 17.1 million, surpassing 17 million units for the first time since 2000.

Vehicle inventory at the end of August dropped to a 56-day supply, compared with 61 days at the end of July. Both car and truck inventory are at below-normal levels, with a 53-day supply for cars and a 58-day supply for trucks.