New-Vehicle Retail Sales in February Expected to Cross the Million Mark

WESTLAKE VILLAGE, CA -- Feb. 20, 2015: New-vehicle retail and total sales in February 2015 are expected to reach their highest levels for the month since 2002, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail Light-Vehicle Sales

New-vehicle retail sales in February 2015 are projected to reach 1,033,100 units, which is a 9 percent increase compared with February 2014 and the highest retail sales volume for the month as well as the first time that February retail sales are expected to exceed 1 million units since February 2002, when sales hit 1.1 million. The retail seasonally adjusted annualized selling rate (SAAR) in February is expected to be 13.5 million units, 1.1 million units stronger than February 2014 and the highest retail SAAR for the month since February 2004 (13.6 million). Retail transactions are the most accurate measure of consumer demand for new vehicles.

"The industry had a great start to 2015 in January, and that sales momentum continues in February with exceptional growth in retail sales," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.

Humphrey noted that automakers continue to take advantage of strong residual values to provide attractive lease deals for consumers. Lease penetration through the first 11 selling days in February is 27.4 percent of retail, its highest level ever.

The compact SUV segment is leading the industry in retail sales for a fifth consecutive month, accounting for 15.2 percent of retail sales thus far in February, while the midsize car segment continues to struggle, slipping to fourth in sales volume behind the compact SUV, compact car and midsize SUV segments.

Total Light-Vehicle Sales

Total new light-vehicle sales in February 2015 are expected to reach 1.3 million units, a 9 percent increase, compared with February 2014, and match the recent high for the month set in February 2002. Fleet volume in February is projected to hit 264,000 units, accounting for 20 percent of total sales.

Figures cited for February 2015 are forecasted based on the first 11 selling days of the month. Sales Outlook

New-vehicle sales in early 2015 are continuing the robust pattern from the fourth quarter of 2014. As a result, LMC Automotive is increasing its 2015 forecast for both retail and total light vehicles by approximately 40,000 units, each still rounding to 14.0 million and 17.0 million, respectively.

"Strength at the start of 2015 is a key factor in keeping the industry on target to surpass annual vehicle sales of 17 million units for the first time since 2001," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Given all the positive factors, including the economy, gas prices and fresh new products in showrooms, rain clouds are expected to stay out of the auto sales forecast for the duration of 2015."

North American Production

Light-vehicle production in January increased 3 percent to 1.3 million units, compared with January 2014. While most automakers worked around the West Coast port strike by using air freight and reducing overtime, there are some cutbacks in production. February 2015 production is expected to drop to 1.3 million units, a 3 percent decline from February 2014. LMC Automotive forecasts that 2015 production will finish at 17.5 million, a 3 percent gain from 2014.

Ahead of the spring selling season, inventory levels increased to a 82-day supply at the beginning of February 2015, up from 61 days at the beginning of January and still below the 88-day supply at the start of February 2014.