New Car Sales Forecast: Higher in March

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The March forecast for new car sales calls for a year-over-year increase of 2% to a seasonally adjusted annual rate of 15.7 million units according Kelley Blue Book (KBB). The forecast for the quarter, however, calls for a decline of 0.3% compared with the first quarter of 2013.

A senior analyst at KBB said, “[T]he industry should start to bounce back in March. The momentum built in March should set the market up for a big month in April.” New vehicle sales in March, including fleet sales, are expected to rise to 1.475 million units, up 23.8% from February. The seasonally adjusted annual rate of sales is expected to rise from 15.3 million units in February of 2014 and March of 2013 to 15.7 million units. Retail sales are forecast to account for 82% of all sales.

KBB expects Chrysler Group LLC to post the biggest year-over-year gain in March, 7.2%. Toyota Motor Corp. (NYSE: TM) is expected to get an increase of 2.3%, while Ford Motor Co. (NYSE: F) is expected to get a 1% boost, and General Motors Co. (NYSE: GM) should see a gain of just 0.4%. Sales for Honda Motor Corp. (NYSE: HMC) are slated to be flat with March of 2013.

Sales at Nissan are forecast to rise 1.7% on the strength of the carmaker’s popular compact crossover Rogue model. Subaru and Toyota also have strong sellers in the compact crossover segment with their Forester and RAV4 models.

KBB’s analyst notes:

Consumers are opting for compact crossovers at the expense of segments like mid-size cars, which transact just $1,500 lower. Kelley Blue Book expects mid-size cars to remain mostly flat in March due to big sales of the Toyota Camry, Nissan Altima and Honda Accord, but demand in this segment in 2014 has been weaker than the previous two years.

Carmakers are expected to report sales next Tuesday.

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