June 28, 2013 at 10:10 AM ET
Keith Srakocic / AP
In this Wednesday, May 8, 2013 photo, a row of new 2013 Ford Fusions is seen at an automobile dealership in Zelienople, Pa.
It seems like the recent stock market tumble, and the perception that interest rates are rising, are, at most, background noise to American car buyers.
Sales of new cars and trucks continue to move along at a steady clip during June, according to new estimates from J.D. Power & Associates and LMC Automotive. A monthly sales forecast based on direct dealer data indicates new-vehicle retail sales are showing no signs of letting up at the start of the summer selling season.
New-vehicle retail sales in June are projected to come in at 1,118,800 vehicles, which represent a Seasonally Adjusted Annualized Rate of 13.2 million units, a healthy increase of 500,000 from the May SAAR. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.
Total light-vehicle sales in June 2013 are expected to grow by 12 percent from June 2012 to 1,380,800 units. Fleet sales in June are just 19 percent of total sales. Fleet volume for the month is projected at 262,000 units.
Adding together retail and fleet business and the overall SAAR is expected to reach 15.7 million units this month. That?s a big jump from the 14.5 million vehicles sold in 2012 ? a five-year high ? and nudges by even the most optimistic forecasts for 2013, which general had set a high of around 15.5 million sales this year.
The strong selling pace continues to be matched by strong transaction prices. Thus far in June, the average transaction price of new vehicles ? what customers actually spend when both incentives and options are included ?is $28,900, the highest figure ever for June.
While sales overall are strong, not all segments are selling at the same pace. Sales of premium vehicles account for just 11.7 percent of new-vehicle retail sales thus far in June, down from 12.9 percent in June 2012.
?Although the premium segment growth has lagged non-premium, there is some good news for the industry in that the average price of premium vehicles in June is $47,000, up almost 4 percent from June 2012,? said John Humphrey, J.D. Power senior vice president of the global automotive practice. ?New premium vehicles entering the market late this year will also help bolster sales through the second quarter of 2014.?
Among other new models due for launch are the all-new Mercedes-Benz S-Class and a trio of luxury diesels from Audi.
The underperformance of premium light-vehicle sales is largely due to the age of the models in these segments. J.D. Power calculates that the average age ? the number of months the vehicle has been in the market since it was introduced or redesigned ? of premium models sold in the second quarter of 2013 was 43 months. In comparison, the average age of non-premium models, excluding pickup trucks is only 34.5 months.
Hyundai America chief executive officer John Krafcik noted last week that competition in the auto industry is very fierce and forces manufacturers to intensify efforts to win over customers. Even the threat of higher interest rates hasn?t undermined the market?s momentum, he said.
Competition in the mid-sized segment has been particularly fierce in recent months with Toyota, Honda, Nissan, Ford, General Motors, Hyundai, Volkswagen and Kia all introducing new or substantially updated models. The compact and subcompact segment also have seen a flood of new entries.
J.D. Power expects that by the second quarter of 2014, the average age of premium products will fall to just 33 months, as new and redesigned products enter the marketplace.
LMC Automotive continues to hold the outlook for total light-vehicle sales in 2013 at 15.4 million units, but has increased its forecast for retail light-vehicle sales to 12.6 million units from 12.5 million units, as retail sales growth expands.
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