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January U.S. Car Sales Start Strong, Then Slow Down: J.D. Power

January 25, 2002

January U.S. light vehicle sales are still strong despite the scheduled end of several manufacturer zero percent financing programs this month, according to J.D. Power and Associates.

Sales of new light vehicles in January are forecasted to reach a 16.2 million seasonally adjusted annualized rate (SAAR), based on Power Information Network (PIN) retail sales data from the first two weeks of the month.

Sales reached nearly a 20-million-unit SAAR in the first week of 2002, after December averaged a 16.4 million-unit rate. Retail sales in the second week of January slipped to a lower but more sustainable 15-million-unit selling rate.

"Early January success may largely have been attributed to consumers trying to finalize deals before zero percent financing incentives programs expired," said Dr. Bob Schnorbus, chief economist at J.D. Power and Associates. "The second half of the month could weaken further from the pace of the first half, but new incentives are already being put into place by some manufacturers to help prevent a sharp slump in sales after zero percent financing is completely phased out."

Many of these new incentive programs are being extended into March.

If sales remain at a 15-million-unit pace over the remainder of the month, the January sales pace will be a respectable 16.2 million, which is consistent with the firm's initial forecast for the month.

J.D. Power and Associates sales forecasts are derived from a joint effort between its Global Forecasting Department and PIN, a division of J.D. Power and Associates that gathers new-vehicle retail transaction data from more than 5,000 participating auto franchises in 23 U.S. markets.

About J.D. Power and Associates

Headquartered in Agoura Hills, Calif., J.D. Power and Associates is a global marketing information services firm operating in business sectors including market research, forecasting, consulting, training and customer satisfaction.

J.D. Power and Associates can be accessed through the Internet at www.jdpa.com.

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