New-Vehicle Retail Sales Down in March, the First Drop Since 2010

DETROIT, March 28, 2016 -- New-vehicle retail sales in March are expected to be 2% lower than a year ago on a selling-day-adjusted basis, the first time there has been a year-over-year decline in sales since August 2010, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Aided by two additional selling days—March 2016 has 27 selling days, compared with 25 in March 2015—new-vehicle retail sales on a pure volume basis this month are projected to reach 1,299,600 units, up from 1,226,596 in March 2015.

• The seasonally adjusted annualized rate (SAAR) for retail sales in March 2016 is expected to reach 13.4 million units, down slightly from 13.5 million units in March 2015.
• Total light-vehicle sales in March are expected to reach 1,646,000, down 1% on a selling-day adjusted basis from 1,543,523 from a year ago, but the strongest total sales in March since 2000 (1,664,316).
• The SAAR for total sales is projected at 17.0 million units in March 2016, down 0.1 million units from 17.1 million a year ago.

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

¹Figures cited for March 2016 are forecasted based on the first 17 selling days of the month.
²The percentage change is adjusted based on the number of selling days in the month (27 days in March 2016 vs. 25 days in March 2015).

• With average transaction prices of $30,800, consumer spending on new cars will exceed $40 billion, a first for the month of March. The previous March record was $37.5 billion in 2015.
• Lease penetration through March 20 is 30%, a record level for the month of March but down from 32% in February.
• Retail car sales are down 13.2% and truck sales are off 2.8% in the first half of March 2016, compared with the first half of 2015. Ten of the 25 segments are showing double-digit losses year over year, including compact SUVs, compact cars and midsize cars. 
• Premium sales are down 9.7%, with only the compact SUV, compact sporty car and small SUV segments showing growth.

Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power, said: "The retail sales pace in March exhibited a slower-than-normal acceleration during the month, resulting in the retail SAAR coming in slightly below last year's level. Sales are being supported by a number of factors, including incentives, elevated leasing and long-term loans. While these factors are delivering benefits to the industry by enabling record revenues, we need to be mindful of the risk they pose to the long-term health of the industry."

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: "Auto sales are not yet peaking and the outlook for the year remains robust, even with some retail softness and noise in March. In fact, year-to-date volume is still nearly 5% ahead of year-to-date March 2015, leaving some room for additional volatility and the expected slower growth rates later in the year."

LMC Automotive's forecast for 2016 is holding at 17.8 million units for total light-vehicle sales and 14.5 million units for retail light-vehicle sales.