Auto gains

The December new-vehicle retail sales pace is significantly beating expectations, driving a strong close to a challenging year of recovery, according to J.D. Power and Associates.

J.D. Powers, a global marketing information company, gathers the info for its monthly reports by capturing real-time transaction data from more than 8,900 U.S. retail franchisees.

The company reports that December new-vehicle retail sales are expected to come in at 936,300 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.8 million units. December retail sales are expected to be up 19 percent from one year ago. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

“Even with the possibility that sales in the third week of December may be affected by the recent winter storms, the strength in sales during the second week is expected to continue through the rest of the month," Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, said in a statement. "As a result, it appears that 2010 will end on a high note."

OTHER REPORT NOTES
• Total light-vehicle sales for December are expected to come in at 1,133,000 units, which is 14% higher than December 2009.

• Given a stronger-than-expected retail performance in December, J.D. Power and Associates has increased its retail sales forecast for the year to 9.2 million units (from 9.1 million units). The forecast for total light-vehicle sales in 2010 has also been adjusted to round up to 11.6 million units (from 11.5 million units)

• For 2011, J.D. Power’s forecast remains at 10.4 million units for retail sales and 12.8 million units for total sales.

• Nearly 11 million vehicles have been manufactured in North America YTD through November. With December projected at 800,000 units, 2010 production is expected to end at 11.8 million units — up 38% from 8.5 million units in 2009.

• Of the three countries comprising North America, Mexico is expected to post the strongest year-over-year increase, with production up nearly 50% to 2.2 million units. Mexico is benefiting from a strong increase in truck production from the Detroit Three, as well as the addition of the Ford Fiesta to production. Canadian production is expected to be up 39% to 2.1 million units, while volume in the U.S. is projected to be up 35% to 7.6 million units.

• Vehicle inventory at the beginning of December was steady, compared with November, at 67 days supply. In comparison, the days supply is up 5 days from the level at the beginning of December 2009 (62 days). Currently, car inventory is outpacing truck inventory at a 71-day supply, compared with a 64-day supply.

• The outlook for production in North American in 2011 has been increased slightly to 12.7 million units (from 12.6 million units), which is 8% higher than in 2010.