Consumer Spending on New Vehicles Forecast at All-Time High for December
Cold Weather Freezes January Car Sales
J.D. Power and strategic partner LMC Automotive have released their final new-vehicle sales and production forecast for 2013, and they expect December sales to rise 4% over the same month in 2012, with an average transaction price of $30,500--a $500 increase per vehicle over last December. According to the forecast, consumers will spend more than $34 billion on new vehicles in December of 2013, a new record for the month thanks to higher average transaction prices and continued strong retail sales.
"Retail sales in 2013 are expected to reach 12.8 million, with consumer spending reaching a record $375 billion--a $40 billion increase from 2012," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.
Next year, LMC Automotive expects retail light-vehicle sales to rise another half million units, to 13.3 million, and it appears that Chrysler, Ford, and General Motors have ramped up production to meet demand. According to Jeff Schuster, senior vice president of forecasting at LMC Automotive, inventory levels for the Detroit Three had reached a 93-day supply at the end of November.
"The budget deal in Washington is helping fuel a higher level of optimism for the economy and auto sales in 2014," said Schuster. "The year ahead is set up to edge new-vehicle sales closer to pre-recession levels."
The impact on production is clear. In addition to several automakers actively building inventory near the end of 2013, North American factories built 700,000 more vehicles in 2013 than they did in 2012. LMC Automotive expects factory output to increase by 400,000 vehicles in 2014.