Chryslers Belvidere plant built its one millionth compact vehicle on 28 July. Jeep sales (this is a Patriot destined for Lewisburg, Pennsylvania) were up 14.4% in July

Chrysler's Belvidere plant built its one millionth compact vehicle on 28 July. Jeep sales (this is a Patriot destined for Lewisburg, Pennsylvania) were up 14.4% in July

The US light vehicle retail selling rate in August is expected to decline slightly from a relatively strong level in July, but remains above the selling rate from the first half of 2010, according to analysts at JD Power.

The firm says that August new vehicle retail sales are expected to come in at 857,000 units, which represent a seasonally adjusted annualised rate (SAAR) of 8.9m units. August’s selling rate is expected to decrease slightly from July’s selling rate of 9.2m units.

Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles, JD Power notes.
 
“Incentive levels are down 8% from July, but retail light vehicle sales in August are showing relative strength,” said Jeff Schuster, executive director of global forecasting at JD Power.

“While August retail sales are expected to be down 22% from August 2009, if the distortion from 2009’s CARS program [cash for 'clunkers' scrappage incentive] is removed, August 2010 is actually up about 14% on a selling day-adjusted basis, signalling continued improvement year over year.”

Total light vehicle sales for August are expected to come in 15% lower than August 2009, which was impacted by the CARS program. JD Power estimates the total market SAAR for August 2010 at 11.8m units versus a CARS-boosted 14.1m units in August last year.

However, with an increase in fleet activity, the August selling rate is up by 300,000 units, compared with July. Fleet sales in August are expected to account for 17% of total sales, which is down from the year-to-date level of 22%, but significantly higher than August 2009 when fleet sales accounted for 9% of total sales.
 
Forecast
As a result of the lower-than-expected retail sales rate, JD Power says it has revised its 2010 forecast downward slightly to 9.2m units for retail sales (from 9.4m units) and 11.6m units for total sales (from 11.7m units).
 
The flattening of the recovery is expected to extend into 2011, impacting the sales outlook for the year. JD Power’s 2011 forecast has been revised downward to 10.7m units for retail sales and 13.2m units for total sales.

Schuster maintains that lacklustre economic conditions are acting as a constraint to the pace of vehicle market recovery in the US.

“Lower consumer spending - fuelled by current economic conditions and a high unemployment rate - and lower incentive expectations are impeding the pace of the recovery,” said Schuster. “While a sharper uptick in vehicle sales was previously expected for 2011, the reality of a prolonged recovery has driven a reduction in the forecast.”
 
North American Production
On a year-to-date basis through July, North American vehicle production is up 67%, compared with the same period in 2009, according to JD Power figures..

The Detroit 3 manufacturers account for 61% of the increased production volume seen thus far in 2010. Overall, as production volumes in the second half of 2010 level off, light vehicle production in North America is expected to end the year with almost 11.5m units produced, an increase of nearly 35% from 2009.
 
Vehicle inventory continues to be maintained at a 'disciplined level', Schuster notes, with days supply at the end of July decreasing slightly to 52 days - three fewer days than at the end of June.
 
“Through industry-wide inventory management, manufacturers are showing impressive restraint in not over-producing,” said Schuster.

“However, this restraint is causing shortages in certain vehicle lines, so the desired balance between supply and demand at a model level is still a work in progress.”

See also: US: July sales ahead year on year

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more