Strong January auto sales boost 2013 outlook
Toyotas wait to be picked up by dealers in Long Beach, Calif., last month. U.S. inventories were down to an "ideal level" of 59 days this month, LMC said today.
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U.S. auto sales have been unexpectedly strong in January, adding to optimism about the industry's growth potential in the year ahead, analysts said.
The results so far prompted LMC Automotive today to increase its full-year U.S. light-vehicle sales forecast from 15 million to 15.1 million.
LMC estimates that sales increased 8 percent in January from a year ago to a seasonally adjusted, annualized rate of 15 million.
Edmunds.com was even more bullish in a forecast issued Thursday, projecting a 14.5 percent year-over-year gain and an annualized rate of 15.3 million.
December's SAAR was 15.3 million. Total U.S. sales in 2012 rose 13 percent to 14.5 million, the third consecutive year of double-digit growth after demand fell to a 27-year low in 2009.
January and February are typically among the weakest months of the year for U.S. auto sales in terms of actual volume. The Edmunds and LMC forecasts represent declines of 23 percent and 33 percent from December, respectively.
"The year is off to a fast start, which bodes well for the remainder of 2013," John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, which is affiliated with LMC, said in a statement. "Building on the momentum the industry has been gaining over the past two years, sales remain on a trajectory to return to pre-recession levels within the next few years."
Edmunds estimates that each of the five largest automakers will post January increases of at least 16 percent. It expects Ford Motor Co. and Chrysler Group to report the largest gains.
"January's numbers show that vehicle sales stayed strong even after the holiday ads faded away and the replacement sales following Hurricane Sandy started to dry up," Jessica Caldwell, Edmunds' senior analyst, said in a statement. "These results certainly reinforce the exuberance and optimism that filled the air last week at the North American International Auto Show in Detroit."
J.D. Power said it expects the highest January retail selling rate, which excludes fleet sales, in five years. It said retail new-vehicle sales likely will increase 14 percent to 812,600 vehicles, which translates to a retail SAAR of 12.9 million. That pace exceeds J.D. Power's full-year retail sales forecast of 12.4 million.
"The global industry is looking for the United States to offset risk in Europe and potentially slower growth in the emerging markets in 2013," said Jeff Schuster, LMC's senior vice president of forecasting. "The good news is that the U.S. market is primed to overdeliver as the recovery heats up. The concern now is shifting from the continuing recovery to whether the automotive supply base will be able to keep up with hearty demand."
LMC said it expects inventories to fall to a 59-day supply this month -- an "ideal level" -- from 69 days in December.
"With inventory in check and demand remaining strong," Schuster said, "all indications suggest that production levels -- and automotive supplier profits -- will be at a high pace during 2013 for North America."
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