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KBB Predicts 10 Percent Increase in January New-Car Sales

January 26, 2012
3 min to read


IRVINE — Kelley Blue Book predicated yesterday that January new-vehicle sales will fall 30 percent below the December high, and end the month at 900,000 units sold. This equates to a 13.2 million seasonally adjusted annualized rate (SAAR).


On a year-over-year basis, 900,000 units would market a nearly 10 percent increase from last January. For the year, KBB forecasts new-vehicle sales to surpass 13.3 million units this year, a predication that’s based on its expectations that the U.S. economy will continue its recovery at a moderate pace. The vehicle information sites also expects rising demand from consumers to replace their aging vehicles, reported F&I and Showroom magazine.

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"Our analysts have produced a regression model that explores unemployment, housing, consumer confidence and seasonal patterns to assist with our sales forecast for the year," said Alec Gutierrez, senior market analyst of automotive insights for KBB. "Given current market conditions and our expectations for 2012, we believe sales will continue to improve at a conservative pace in 2012."


Improving unemployment conditions and heightened demand stemming from the increasing age of vehicles is expected to help drive sales in 2012, according to KBB. "The more comprehensive measure of unemployment provided by the Bureau of Labor Statistics, U6, which includes part-time workers that would prefer to work full time and marginally attached workers, is still at 15.2 percent," Gutierrez said. "While this is lower than the 15.6 percent of November, it is still quite high overall."


Consumer confidence and housing are projected to remain relatively stable through 2012 and will not influence sales significantly, according to KBB. If current projections hold true, 2012 will be another solid year for manufacturers, but significant downside risks that could slow down the momentum of the sales recovery remains.


"We remain especially concerned about the ongoing European debt crisis and the heightened tensions with Iran as potential events that could derail the current U.S. vehicle sales recovery," Gutierrez said. "The European debt crisis has been of particular concern in recent weeks due to the debt rating downgrade of France, Portugal, Italy, and other European economies, leading to concerns for their ability to generate interest in future bond offerings."


The site’s analysts project that General Motors, Ford and Toyota to lead new-vehicle sales in January, citing the brands’ recent redesigns. "General Motors will be led by strong performances from the Chevrolet Silverado, the hot-selling compact Cruze, and the Equinox crossover, while later in the year a new redesign for the Chevrolet Malibu also will help boost sales for GM," Gutierrez said.

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Ford will look to the redesigned Focus, Fiesta and F-150, to drive sales in January, Gutierrez added. The 2013 Escape and Fusion redesign also will help keep Ford's sales momentum strong. After losing market share from recalls in 2010 and the inventory shortages resulting from the earthquake in Japan in 2011, Toyota will look to the redesigned Yaris, Camry and Prius V to inflate sales in January.


"In January, we are currently projecting GM and Ford to maintain 18.8 and 16.1 percent share, respectively," Gutierrez said. "Although GM and Ford will lead sales overall, Toyota isn't too far behind in third place and they will likely push to regain share throughout 2012."


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