New-Vehicle Retail Sales Daily Selling Rate on Record Pace for January

DETROIT -- January 28, 2016: Despite heavy snows that hit the East Coast last weekend, an average of 36,499 new-vehicles are projected to be sold each day—known as the daily selling rate (DSR)—at dealerships in January, a record daily pace for retail sales for the month, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

The seasonally adjusted annualized rate (SAAR1) for retail sales in January 2016 is expected to reach 13.9 million units, up from 13.8 million units in January 2015, and would be the strongest retail SAAR in the month of January since 2004 (13.9 million). Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

Even with the brisk daily selling rate, new-vehicle retail sales on an absolute volume basis are expected to be down in January, due in large part to two fewer selling days compared with January 2015. New-vehicle retail sales in January are projected to reach 876,000 units, a 2.9% increase on a selling-day adjusted basis, but down from 922,055 in January 2015.

Retail Light-Vehicle Sales Snow Storm Jonas has had a significant impact on car sales. During the storm-affected weekend (January 22-24), new-vehicle retail sales were down 30% in the eastern regions, compared with the same period a year ago. In contrast, sales in the western regions increased 5%.

"The snow storm on the East Coast disrupted an estimated 15,000 sales," said John Humphrey, senior vice president of the global automotive practice at J.D. Power. "Despite the storm, we're still seeing a strong month. It's also important to note that sales weren't necessarily lost during the storm. We expect to see some of those sales made up this month, and the majority of them recovered in February."

Humphrey noted that J.D. Power and LMC Automotive will continue to monitor the effects of Jonas on new-vehicle sales through the remainder of the month and in February.

Through the first 17 selling days of the month, the average transaction price of $30,769 is the highest level ever for any January, surpassing the previous high of $30,707 set in 2015.

Total Light-Vehicle Sales Total light-vehicle sales are expected to reach 1,097,000, a 3.4% increase on a selling-day adjusted basis, compared with January 2015. The SAAR for total sales projected to reach 16.8 million units in January 2016, up from 16.7 million in a year ago and the highest rate since 2006.

Sales Outlook LMC Automotive's forecast for 2016 remains 17.8 million units for total light-vehicle sales, but the outlook for retail light-vehicle sales was revised down 500,000 to 14.5 million units.

"We expect 2016 to be another record year, but all eyes will be tracking the expected slower growth rate as the year progresses," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "All brands will not be able to grow as they have over the past few years, creating a higher level of competitive intensity and pressure on each brand."

North American Production North American production in December 2015 was 1.256 million units, a 1.4% increase compared with December 2014. Production finished the year at 17.5 million units, a 3% increase. Inventory starts the year with a 61-day supply, down from a 65-day supply in December. LMC Automotive is maintaining its production forecast 2016 forecast at 18.1 million units, the first time volume in North America will cross the 18 million-unit level.