J.D. Power/LMC: Snow Storm Slows But Doesn’t Stop Car Sales in January
The two firms expect January total light-vehicle sales to total 1.1 million units, while the January SAAR is expected to have reached 16.8 million units. LMC Automotive said its sales forecast for 2016 remains at 17.8 million units.
DETROIT — Despite the heavy snow that hit the East Coast in late January, an average of 36,499 new-vehicles are projected to have been 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 (SAAR) for retail sales in January 2016 is expected to reach 13.9 million units, up from 13.8 million units in January 2015. That would make January’s SAAR the strongest retail SAAR since January 2004 (13.9 million).
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.
Snow Storm Jonas has had a significant impact on car sales. During the storm-affected weekend (Jan. 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 [at the end of the month], and the majority of them recovered 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 are expected to reach 1.1 million units, a 3.4% increase on a selling-day adjusted basis compared with January 2015. The SAAR is expected to have reached 16.8 million units in January, up from 16.7 million in the year-ago period and the highest rate since 2006.
Fleet volume in January is projected to have reached 221,100 units, a 5.4% increase on a selling-day adjusted basis from January 2015. Fleet share is expected to be 20% for January, the same level and volume as a year ago.
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.”
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