July 2011 US new vehicle retail sales are projected to come in at 913,900 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.8 million units, according to J.D. Power and Associates estimates. This figure is up 5% from 9.3 million in June 2011 and up 6.5% from 9.2 million in July 2010.
However, new vehicle retail sales are still down from the first four months of the year, when they fluctuated between an adjusted 10.7 million and 11.2 million units.
Light Vehicle Sales Up 8% YOY
Total light vehicle sales in July are expected to come in at almost 1.09 million units, which is 8% higher than about 1.05 million in both July 2010 and June 2011. Fleet deliveries are typically low in July, according to J.D. Power historical data, and are expected to represent 16% of total sales at 174,000 units for the month.
Sales Outlook Encouraging
Retail light vehicle sales in the second half of 2011 are expected to outperform the first half of the year, with the selling rate averaging 10.7 million units, up about 4% from 10.3 million during the first half of 2011. Including fleet sales, the total light vehicle selling rate is also expected to be stronger during the second half of 2011 at 13.2 million units, up close to 6% from 12.5 million during the first half of the year. J.D. Power’s 2011 retail light vehicle forecast remains at 10.5 million units and total light vehicle sales forecast remains at 12.9 million units.
North American Production Up 8% So Far
North American production through the first half of 2011 has increased by 8% from the same period in 2010, with 6.4 million light vehicles produced (compared to 5.9 million units in the first half of 2010). J.D. Power analysis indicates disruptions from the March 2011 Japanese earthquake/tsunami disaster are easing for the Japanese automakers, as production among these companies returns to normal levels in North America. In addition, the pace of their recovery will quicken through the second half of 2011. For 2011, North American light-vehicle production is forecast at 12.9 million units, up 9% from 2010.
Inventory Up 5 Days from June
Vehicle inventory has increased to a 54 days’ supply at the beginning of July, up from a 49-day level in June. Car inventory started the month at a 43 days’ supply, while trucks were at 67 days’ supply. Several models in the compact segments, such as the Toyota Prius, Ford Focus and Honda Civic, have inventory levels of fewer than 25 days and may experience limited sales due to the low availability.
Hyundai, Ford Lead New Model Sales
Production of the 2012 model year vehicles continues to ramp up. Through mid-July, nearly 12% of retail market sales were of 2012 model-year vehicles. Hyundai (42% of July month-to-date retail sales) and Ford (16%) have the highest mix of new model-year vehicles thus far.
Emerging Market Share Set to Grow
Share of global light vehicle sales held by emerging markets is expected to increase steadily to 60% in 2015, according to projections released by J.D. Power in April 2011. Sales in China in 2015 are projected to total 29 million units, followed by the US with just 16.5 million units.
J.D. Power predicts that mature markets like the US, Western Europe and Japan are only expected to return to pre-recessionary sales levels by 2015, and during that period they will be overshadowed by exponential growth in the “BRIC” nations of Brazil, Russia, India and China.
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 publisher of the enclosed charts.