January 2001 was a better month for light vehicle sales than some had feared, according to a new Frost & Sullivan report from automotive analyst Joerg Dittmer.

The daily selling rate (DSR) for light vehicles dropped to 45,097 in January 2001, down 6.7 percent from strong sales in January 2000. The DSR was up 3.0 percent compared to January 1999, a year that also saw strong sales.

Demand for light vehicles tends to be slow in January. Adjusting for seasonality, the DSR was 55,828 in January 2001, or 16.7 million at an annual rate. Although this is below the 17.4 million units sold in 2000, it falls only slightly short of the 16.9 million sold in 1999.

Minivans Losing Popularity?

The relative slowing of overall vehicle demand is attributed to a weakening economy. According to Dittmer, given the negative economic signs seen in recent months, the question is not “Why are vehicle sales slowing?”, but rather “Why are sales not slowing more?”

"Possibly demand is shifting to more modest vehicles – instead of deferring purchases, vehicle buyers may be choosing less-expensive vehicles," Dittmer said.

Family cars increased their share in January, while minivans appear to be losing favor. Demand for sport utility vehicles, however, is holding up well. Overall, light trucks may be losing share to cars.

North American Nameplates Recover Share

North American nameplates recovered market share in January, rising to 63.7 percent, according to Frost & Sullivan. However, this came after a low of 61.0 percent in December.

Similarly, North American-made vehicles recovered share, rising to 81.9 percent of unit sales in January after a low of 80.4 percent share in December. Many foreign-nameplate vehicles are now made in North America.

Outlook for 2001

The mood on the economy has swung from too optimistic to too pessimistic, according to Dittmer. While light vehicle sales have slowed from the hot pace of early 2000, sales of 16-plus million units in 2001 still would be respectable.

The Frost & Sullivan forecast calls for sales of 16.2 million units, which would make 2001 the third-best year on record (after 2000 and 1999). The only other year in which US light vehicle sales exceeded 16.0 million units was 1986.

Sales are expected to be slightly above the long-term trend line in 2001, but are then expected to drop below the trend line for two years before recovering.

For a comprehensive view of the U.S. Automotive Productions & Sales Databases contact Rolf Gatlin at 210-348-1017 or e-mail rgatlin@frost.com and reference Frost & Sullivan report #9803-18.