WESTLAKE VILLAGE, Calif. —January’s new-vehicle selling rate is off to its strongest start in five years, according to a monthly sales forecast developed by J.D. Power and Associates’ Power Information Network (PIN) and LMC Automotive.

January new-vehicle retail sales are expected to total 812,600 units, which represent a seasonally adjusted annualized rate (SAAR) of 12.9 million units. If the prediction holds true, the rate would be well ahead of the expected 12.4 million-unit annual level for 2013.

“The year is off to a fast start, which bodes well for the remainder of 2013,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “Building on the momentum the industry has been gaining over the past two years, sales remain on a trajectory to return to pre-recession levels within the next few years.”

U.S. Retail SAAR—January 2012 to January 2013

(in millions of units)

Total light-vehicle sales in January are projected to reach 1.028 million units, an 8 percent increase from January of last year. The share of fleet sales is expected to reach 21 percent, considerably lower than the 25 percent share recorded in January 2012, signaling continued discipline in the industry-related rental car fleet sales.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

¹Figures cited for January 2013 are forecasted based on the first 15 selling days of the month.

²The percentage change is adjusted based on the number of selling days in the month (25 days in January 2013 vs. 24 days in January 2012).

Based on a strong finish in 2012 and a higher-than-expected pace to begin 2013, LMC Automotive said it is increasing its 2013 U.S. forecast for total light-vehicle sales by 100,000 units to 15.1 million. In addition, the firm’s outlook for retail light-vehicle sales increased to 12.4 million units from 12.2 million units for 2013.

“The global industry is looking for the United States to offset risk in Europe and potentially slower growth in the emerging markets in 2013,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “The good news is that the U.S. market is primed to over-deliver as the recovery heats up. The concern now is shifting from the continuing recovery to whether the automotive supply base will be able to keep up with hearty demand.”

North America light-vehicle production was 15.4 million units in 2012, 18 percent higher than in 2011, marking the first time since 2007 that North American production has surpassed 15 million units.

Vehicle inventory returned to an ideal level in early January to a 59-day supply, compared with 69 days in December. A strong sales pace in November and December 2012, coupled with the holiday production shutdown period in late 2012, drove inventory down to the current level. Overall, there are approximately 3.1 million units currently available on dealer lots or in transit — an increase of about 600,000 units from January 2012. 

LMC Automotive projects the 2013 North American production to be 15.9 million units in 2013, a 3 percent increase from 2012, with further upside potential contingent on the pace of demand in the first half of the year. For 2014, the North American production forecast is expected to increase to 16.6 million units.

“With inventory in check and demand remaining strong, all indications suggest that production levels—and automotive supplier profits — will be at a high pace during 2013 for North America,” said Schuster.