JD Power: May new car sales could hit 14.1M, tops in 2015…so far

WESTLAKE VILLAGE, Calif.: — U.S. new-vehicle retail sales, on a selling-day adjusted basis, in May 2015 are expected to reach their highest levels since August 2014, according to a monthly sales forecast from J.D. Power and LMC Automotive.

Retail Light-Vehicle Sales

The new-vehicle retail seasonally adjusted annualized selling rate (SAAR) in May is expected to be 14.1 million units, on par with the level reached in May 2014 and the first time the retail SAAR has reached 14.1 million units since August 2014.

New-vehicle retail sales in May 2015 are forecasted to reach 1,300,600 units, a 2 percent increase on a selling-day adjusted basis compared with May 2014. The sales pace of 50,000 units per day in May 2015 is the strongest daily selling rate in the month of May since 2004 when an average of nearly 53,000 vehicles were sold each day. Retail transactions are the most accurate measure of consumer demand for new vehicles.

U.S. Retail SAAR—May 2014 to May 2015  (in millions of units)


Source: Power Information Network® (PIN) from J.D. Power

“The industry continues to outperform prior-year levels with respect to retail sales and transaction prices,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power. “The average new-vehicle retail transaction price so far in May is $30,428, on pace to achieve a new record for the month.” The previous record was set in May 2014 when retail transaction prices averaged $29,400.

The combination of strong sales and high transaction prices positions May to set a new record for the month for consumer spending on new vehicles at approximately $39.6 billion, according to the Power Information Network (PIN) from J.D. Power.  It would become the third-highest level of new-vehicle consumer spending in a month following August 2014 ($40.3 billion) and July 2005 ($39.7 billion).

While average gas prices across the nation have slowly climbed from January’s low of $2.12 per gallon to $2.72 per gallon so far in May, refinery constraints in California have driven fuel prices in that state up at a much faster rate. Regular fuel prices in California averaged $3.77 per gallon so far in Mayup from $2.55 per gallon in January—their highest level since September 2014.

High gas prices are contributing to increased hybrid and electric vehicle (EV) sales, which have accounted for 9.8 percent of all retail new-vehicle sales in California in May, their highest level since August 2014. Hybrid and EV sales have also started to recover nationwide, representing 3.5 percent of all retail sales in May, up from a low of 2.9 percent in February. In August 2014, hybrid and EV sales made up 4.3 percent of nationwide sales and 10.5 percent of retail sales in California.

Total Light-Vehicle Sales

Total light-vehicle sales in May 2015 are projected to reach 1,591,100, a 3 percent increase on a selling day adjusted basis compared with May 2014. Fleet volume is expected to hit 290,500 units, accounting for 18.3 percent of total sales, up from 17.6 percent a year ago.


J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

  May 20151 April 2015 May 2014
New-Vehicle Retail Sales 1,300,600 units

(2% higher than May 2014)2

1,150,557 units 1,322,201 units
Total Vehicle Sales 1,591,100 units

(3% higher than May 2014)2

1,452,241 units 1,605,373 units
Retail SAAR 14.1 million units 13.4 million units 14.1 million units
Total SAAR 17.3 million units 16.5 million units 16.7 million units

1Figures cited for May 2015 are forecasted based on the first 14 selling days of the month.

2The percentage change is adjusted based on the number of selling days in the month (26 days in May 2015 vs. 27 days in May 2014).

Sales Outlook

LMC Automotive is maintaining its total light-vehicle sales forecast for the year at 17.0 million units and its retail forecast at 13.9 million units.

“May’s selling rate is making up for a slightly weaker April, and keeping the year on track to reach the elusive 17 million unit mark,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “Over the next several months, all eyes will be on the timing of the expected increase in interest rates by the Federal Reserve, as the rate increase could have a significant impact on auto sales volume by year-end.”


North American Production

North American production in April 2015 reached 1.49 million units, outpacing March and up 5 percent from April 2015. As a result, automakers built up some inventory as the industry heads into the summer selling season. May started with a 65-day supply, up from 59 days the previous month but still below the 69-day supply the industry was at during the same point last year.

LMC Automotive’s production forecast for 2015 also remains at 17.5 million units, a 500,000 unit increase compared with 2014. The continued popularity of SUVs is helping to drive up production numbers through April 2015, with SUV production in North America up 130,000 units, a 6 percent increase compared with the same period in 2014, with 70 percent of the increase in the midsize and large SUV segments.


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