Auto industry research firm J.D. Power & Associates is forecasting retail new-car sales of 1.085 million units in March, a two-and-a-half year high. The company also projects that seasonally adjusted annual sales will reach 11.6 million units in 2012.
There are some caveats, however:
Barring any future shock related to geopolitical issues in the Gulf region and further upward pressure on the price of oil, we believe sales will continue on a solid pace for the balance of the year.
And what are people buying:
Through the first 18 days of March, sub-compact and compact cars accounted for approximately 23 percent of retail sales in the United States … [and] are quickly moving off dealer lots [in an] average of 42 days … 17 fewer days for sub-compact cars and 46 fewer days for compact cars. Conversely, full-size pickup trucks are sitting on dealer lots an average of 68 days, 11 days longer than they were a year ago.
Fleet sales are expected to add another 2.5 million units to projected new car sales this year, bringing seasonally adjusted total sales for 2012 up to 14.1 million units. The other good news for dealers is that inventory is now turning over in less than 60 days on average, although light trucks are sitting on dealers’ lots for an average of 66 days.