WESTLAKE VILLAGE, Calif. — February new-vehicle retail sales are expected to remain strong, despite being a historically slow time of year for vehicle sales, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 retail franchisees throughout the United States.

Retail Light-Vehicle Sales
February new-vehicle retail sales are projected to come in at 727,500 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.3 million units. This marks the second month of a year-over-year selling rate increase of more than 2 million units. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

“Retail sales in February got off to a slow start due to the snowstorms that affected the country from the Midwest to the Northeast,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “However, the market rebounded quickly in the days that followed, leading to a slightly stronger selling rate than in January.”

U.S. Retail SAAR—February 2010 to February 2011
(in millions of units)

Total Light-Vehicle Sales
Total light-vehicle sales for February are expected to come in at 913,000 units, which is 17 percent higher than in February 2010. Fleet sales are projected to remain stable and continue to account for 20 percent of total sales, with volume at 186,000 units.

J.D. Power and Associates U.S. Sales and SAAR Comparisons

¹Figures cited for February 2011 are forecasted based on the first 11 selling days of the month.

Sales Outlook
The outlook for vehicle sales in 2011 continues to be positive. Retail sales are forecasted at 10.5 million units for the year, an increase of 15 percent from 2010. Total sales are expected to come in at 13 million units for 2011, which is up 12 percent from 2010.

“The stronger retail environment, guided by the new business model that the industry is operating under, is an encouraging signal for 2011,” said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “While fleet sales are not expected to grow at the same rate as retail, a rebound in more profitable commercial and governmental fleet volume will make up a larger proportion of the fleet mix in 2011.”

North American Production
North American production in January came in at nearly 1 million units, or 14 percent higher than January 2010. Production volume is expected to stabilize at a higher level in 2011, but the year-over-year increases are expected to slow. The first-quarter volume is forecasted at 3.2 million units, or 13 percent higher than the same period in 2010. However, the second half of 2011 is expected to be only 4 percent higher than the second half of 2010 (6.1 million units vs. 5.9 million units, respectively).

For 2011, the outlook for North American production has been increased to 12.8 million units (from 12.6 million units) driven by the stronger outlook for vehicle demand. This represents an increase of nearly 8 percent from 2010.

Days’ supply at the end of January 2011 increased to 71 days from 55 days at the end of 2010. However, the 71-day level is consistent with January 2010 and below the last five-year average of 85 days in January. The level of inventory rose to 2.4 million units from 2.3 million units, an increase of 4 percent.