Consumer Spending on New Vehicles to Hit Record Levels for Month of November

WESTLAKE VILLAGE--CA--Nov. 21, 2013: U.S. consumers are expected to spend more than $30 billion on new vehicles in November, a historic high for the month, with light-vehicle retail sales on pace to exceed 1 million for the month, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail Light-Vehicle Sales New-vehicle retail sales in November are expected to reach 1,030,300, a 4 percent increase from November 2012. The November seasonally adjusted annualized rate (SAAR) for retail sales, the most accurate measure of true underlying consumer demand for new vehicles, is projected to be 13.0 million, up from the year-to-date level of 12.8 million.

"Consumer demand for new vehicles remains strong," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.

Through the first half of November, the average transaction price of new vehicles is $30,079, an increase of $461 from November 2012. In combination, sales and transaction price growth means that consumers will spend 10 percent more on new vehicles during the month than they did in November 2012, and nearly double the level of November 2008.

"The level of consumer spending in November is impressive and consistent with trends observed throughout 2013," said Humphrey. "Indications are that total consumer spending on new vehicles in 2013 will exceed $370 billion, the highest on record and considerably above even pre-recession levels."

Total Light-Vehicle Sales Total light-vehicle sales in November are expected to reach 1.2 million, a 3 percent increase from November 2012. Selling day adjusted fleet sales are anticipated to account for 16 percent of total sales in November, a 3 percent decline year over year and consistent with the low fleet share throughout 2013. Sales Outlook LMC Automotive is holding its forecast for total light vehicle sales in 2013 at 15.6 million units and retail light-vehicle sales at 12.8 million units.

"The sales pace in September and October were plagued by external variables that caused a lower level of demand, so the returning strength in November confirms that the underlying recovery remains intact," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Improvements in the economy and consumer confidence in 2014 will drive stable growth to 16.1 million units for total light-vehicle sales and 13.2 million units for retail light vehicles."

North American Production Year-to-date production in North America through October is up 4 percent from the same period in 2012. Production in October was at 1.6 million units, a 7 percent increase from October 2012.

The lower October sales pace, combined with higher production, has led to a 77-day supply, higher than the 60- to 65-day supply normal range.

"While this level is considered high, it is normal for this time of year as manufacturers hurry to build up inventory at dealerships to meet year-end demand," said Bill Rinna, senior manager, North American forecasts at LMC Automotive. "Given this, the production pace should not be affected and we are maintaining our volume outlook for 2013 North American production at 16.1 million units."

First-quarter production in 2014 is expected to increase 4 percent to 4.2 million units from the same period in 2013. Overall for 2014, LMC Automotive is expecting production volume to grow 3 percent to 16.6 million units.