June New Vehicle Sales Up 18% YOY

June 27, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Automotive | B2B | Data-driven | Financial Services | Retail & E-Commerce | Uncategorized

jdpower-us-retail-light-vehicle-sales-june11.gifNew vehicle retail sales rebounded in the first half of June 2011 as consumers, despite mixed economic signals, returned to dealerships, according to J.D. Power and Associates data. June new-vehicle retail sales are projected to come in at 884,800 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.9 million units, up 18% from 8.4 million units in June 2010.

This is also up 6% from 9.3 million units in May 2011.

Large Pickup, Compact Sales Drive Sales Growth

J.D. Power analysis shows large pickup and compact car sales are supporting the overall retail sales increase. Large pickups are accounting for 10.6% of retail sales month-to-date, the highest level since February 2011, while compact cars comprise 17.6% of retail sales, up from 17.2% in May.

Total Sales Up, Fleet Sales Down

jdpower-saar-june-2011.JPGTotal light vehicle sales in June are expected to come in at about 1.1 million units, which is 8% higher than 981,000 in June 2010 and about 4% higher than 1.06 million units in May 2011. New vehicles sales this month are projected to total 884,800 units, about 18% higher than roughly 746,600 units in June 2010 and about 6% more than 833,800 units in May.

However, fleet sales are expected to be lower in June due to inventory shortages and are projected to finish the month at 221,600 units, down 9% from June 2010.

North American Production Rises 10% YOY

Through May, light-vehicle production for North America on a year-to-date basis is up 10% from the same period in 2010. Volume for the first five months of 2011 came in at 5.3 million units, compared with 4.8 million units built during the same period in 2010. Production for Japanese manufacturers has declined nearly 13% thus far this year, as parts shortages have caused volume disruptions.

However, J.D. Power says the recovery pace has been accelerated and most operations are expected to return to pre-disaster levels in the coming weeks. In addition to the recovery of volume with the Japanese brands, production has been ratcheted up among the Detroit Three and European and Korean brands. The Detroit Three are up 18% year-to-date, compared with 2010. The European manufacturers are up 44%, and the Korean manufacturers are up 56 percent for the same period.

Inventory Levels Decline to 49 Days

Inventory levels declined to 49 days’ supply at the beginning of June, five days less than the previous month’s 54 days’ supply. This drop was not as severe as expected, but is consistent with the decline in the selling pace in May. J.D. Power predicts inventory conditions should improve in the coming months, but many smaller size models and some Japanese imported models will remain in very short supply for the near future.

Given the positive news of a faster stabilization with the Japanese manufacturers and higher-than-expected increases by the Detroit Three, J.D. Power’s North American production forecast for 2011 is at the 12.9-million-unit level.

Consumer Caution Dampens Sales Outlook

J.D. Power has reduced its forecast for 2011 retail sales about 1%, to 10.5 million units from 10.6 million units. The forecast for total sales has also been slightly revised to 12.9 million units from 13 million units.

“Conditions for light-vehicle sales are improving, but the automotive market remains fluid and susceptible to a slower economic recovery or external shock,” said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “This risk is driving a more cautious approach to the market outlook for the remainder of 2011 and into 2012.”

Initial Quality Drops

After an improvement in the quality of newly launched models every year from 2007 to 2010, the initial quality of 2011 new model launches has declined considerably, according to the previously released J.D. Power and Associates 2011 US Initial Quality Study. The initial quality of launch models, those that are all-new or have had major redesigns, worsened by 10% to an average of 122 PP100 in 2011 from 111 PP100 in 2010.

About the Data: J.D. Power and Associates gathers real-time transaction data from more than 8,900 retail franchisees throughout the US and is the publisher of the enclosed charts.

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