The US light vehicle market is set to exceed an annual selling rate in excess of 16m units in November as retail customers continue to drive sales up.
A report prepared by JD Power and LMC Automotive said that US consumers are expected to spend more than US$30bn on new vehicles in November, a historic high for the month.
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Total light vehicle sales in November are expected to reach 1.2 million, a 3% increase from November 2012.
“Consumer demand for new vehicles remains strong,” said John Humphrey, senior vice president of the global automotive practice at JD Power.
JD Power’s analysis estimates that through the first half of November, the average transaction price of new vehicles was US$30,079, an increase of US$461 from November 2012. It said that in combination, sales and transaction price growth means that consumers will spend 10% 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 US$370bn, the highest on record and considerably above even pre-recession levels.”
LMC Automotive said that it is holding its forecast for total light vehicle sales in 2013 at 15.6m units and retail light vehicle sales at 12.8m units. It also forecast that the market will expand to 16.1m units in 2014.
“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 at LMC Automotive.
North American production up 7% year-on-year in October
Year-to-date production in North America through October is up 4% from the same period in 2012. Production in October was at 1.6m units, a 7% 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, LMC said.
“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% to 4.2m units from the same period in 2013. Overall for 2014, LMC Automotive is expecting production volume to grow 3% to 16.6m units.
