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J.D. Power and LMC Predict Big Summer for New-Vehicle Sales

June 25, 2013
3 min to read


Westlake Village, Calif.— New-vehicle retail sales are continuing their positive trend in June, with no signs of letting up as the industry heads in the key summer selling season, according to J.D. Power and LMC Automotive.


New-vehicle retail sales in June are projected to total 1.119 million units, representing a seasonally adjusted annualized rate (SAAR) of 13.2 million units — an increase of 500,000 from May’s SAAR.

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While sales overall are strong, not all segments are selling at the same pace. Sales of premium vehicles account for just 11.7 percent of new-vehicle retail sales thus far in June, down from 12.9 percent in June 2012.


The underperformance of premium light-vehicle sales is largely due to the age of the models in these segments. J.D. Power calculates that the average age — the number of months the vehicle has been in the market since it was introduced or redesigned — of premium models sold in the second quarter 2013 was 43 months. In comparison, the average age of non-premium models — excluding pickup trucks — is only 34.5 months.


J.D. Power expects that by the second quarter of 2014, the average age of premium products will fall to just 33 months, as new and redesigned products enter the marketplace.


The strong selling pace continues to be matched by strong transaction prices. Thus far in June, the average transaction price of new vehicles is $28,900 — the highest ever for the month of June.


“Although the premium segment growth has lagged non-premium, there is some good news for the industry in that the average price of premium vehicles in June is $47,000, up almost 4 percent from June 2012,” said John Humphrey, senior vice president of the global automotive practice, J.D. Power. “New premium vehicles entering the market late this year will also help bolster sales through the second quarter of 2014.”

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Total light-vehicle sales in June 2013 are expected to grow by 12 percent from June 2012 to 1.381 million units. Fleet sales in June are just 19 percent of total sales. Fleet volume for the month is projected at 262,000 units.


LMC Automotive continues to hold its 2013 outlook for total light-vehicle sales at 15.4 million units, but it has increased its forecast for retail light-vehicle sales to 12.6 million units from 12.5 million units, as retail sales growth expands.


“There is little question that the automotive market has strong momentum as we close out the first half of 2013,” said Jeff Schuster, senior vice president of forecasting, LMC Automotive. “Looking forward, all the key fundamentals are in alignment to continue the current growth trend, with production capacity limitations being the only major visible risk.”


North American light-vehicle production through June is up nearly 5 percent compared with the same period in 2012. Ford’s 16 percent increase in production thus far in 2013 is leading all manufacturers, with a significant portion of its increase driven by sales boosts for the new Escape and Fusion, as well as its F-Series pickups.


Vehicle inventory levels in early June are holding at 3.2 million units — a 57-day supply, which is down from 64 days last month.

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LMC Automotive’s forecast for 2013 North American production remains at 16 million units, with capacity utilization now at a lean 90 percent.

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