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Early January Returns Point to 12.6 million Year, CNW Reports

January 11, 2011

Sales through the first nine days of January indicate that auto sales could top 800,000 units for the month, an increase of about 18 percent from last year, reported CNW Research.

The Bandon, Ore.-based firm’s True Delivery Rate measurement, which operates similar to the seasonally adjusted annual rate measurement, points to a healthy but not staggering 12.5 million year. Driving CNW’s predictions are upticks in other key measurement areas.

Floor traffic during the opening days of January, including the first two weekends of the month, increased a solid 5.4 percent. Closing ratios also jumped 2.2 percent, an indication that sales could actually top 850,000 barring bad weather or other conditions that could prevent buyers from visiting dealerships.

“With fewer dealerships than January of last year, same-store sales could climb to 5.7 percent,” wrote Art Spinella in his January newsletter.

CNW is projecting that the average core MSRP in 2011 will exceed $33,000. “With incentive spending, especially by dealers, falling, and subprime approvals jumping nearly 75 percent vs. January 2010, transaction prices should climb to nearly $28,000 or 84.6 percent of MSRP,” wrote Spinella. “That’s the best showing in years.”

Additionally, the Key Market for autos – those capable, financial able and somewhat likely to make a new-vehicle acquisition – is expected to grow by more than 2 million in 2011. As a share of the population, the indicator once again tops 12 percent, but remains a long way from the 19 percent seen in 2000 when the industry sold 17.4 million units.

“The intender base and the share of population figures bode well for a solid 2011 sales year,” wrote Spinella. “While 13 million might be a stretch, 12.6 million is increasingly likely. Much will depend on the first quarter’s results.


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