WESTLAKE VILLAGE, Calif. — The new-vehicle retail selling rate in January is expected to decline compared with both December 2009 and one year ago, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 franchisees across the United States.

January new-vehicle retail sales are expected to come in at 500,900 units, which represents a seasonally adjusted annualized rate (SAAR) of 7.9 million units, compared with 8.8 million units in January 2009. This month's selling rate is down from 8.9 million units in December 2009 — one of the stronger sales months in 2009, in part due to robust marketing and incentive programs.

"January is typically a weak selling month, but this month is particularly impacted by December's strong close and extra selling weekend," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "However, the sales pace has been improving as January continues, which is an encouraging sign for the recovering industry."

Fleet sales are expected to increase substantially from January 2009, which marked the lowest fleet level last year. As a result, total sales for January 2010 are projected to come in at 659,000 units, up 9 percent from January 2009. The January SAAR for total light-vehicle sales is expected to increase to 10.1 million units, compared with 9.6 million units one year ago.

J.D. Power and Associates U.S. Sales and SAAR Comparisons - January 2010

¹Figures cited for January 2010 are forecasted numbers based on the first 11 selling days of the month.
²The percentage change is adjusted based on the number of selling days (24 days vs. 26 days one year ago).

J.D. Power and Associates is maintaining its 2010 forecast at 11.5 million units for total sales and 9.5 million units for retail sales. However, with improved leasing availability, loosening credit and healthier economic conditions, the industry's recovery could be more pronounced.

Vehicle inventory is currently at a 53-day supply, compared with 94 days in January 2009. The improved inventory level, combined with growing demand, is leading to increases in North American vehicle production in the first quarter of 2010. Production is expected to increase by nearly 70 percent to 2.8 million units during the first three months of 2010, compared with 1.7 million units during the same period one year ago.

"While North American production remains well below historic levels, the near-term boost will provide much-needed support to the automotive supply base," said Schuster. "Year-over-year increases are expected to continue throughout 2010, resulting in a projected 2 million-unit increase, compared with 2009 levels."