January Sales Forecast Calls for Cold Start, High Inventory

A new WardsAuto forecast indicates the relative slowdown in U.S. light-vehicle sales that began in December will continue this month, while inventory is expected to rise dramatically.

The report calls for U.S. automakers to sell 1.056 million light vehicles this month. The forecast volume (over 25 days) represents a daily sales rate of 42,253 units, a slim 1.5% increase over same-month year-ago (25 days), equating to a 15.85 million-unit SAAR.

December’s seasonally adjusted annual rate for LV sales dropped to 15.3 million units from November’s 16.3 million-unit SAAR, as traditional post-holiday sales failed to match expectations.

The slowdown can be blamed in large part on slower fleet activity across the industry, both in the rental and commercial sectors. Cold weather may have slowed retail traffic at the beginning of the month, but automakers report a thaw in retail sales in recent weeks, despite continued arctic temperatures across much of the country.

The slower overall daily sales and a robust production forecast likely will lead to unusually high inventory by the end of the month.

Automakers entered January with nearly 3.5 million units of stock, and manufacturers are expected to build as many as 1.4 million additional light vehicles this month. While not all the new vehicles are targeted for the U.S. market, the WardsAuto forecast calls for the U.S. days’ supply of light vehicles to rise to 90 by the end of the month, compared with 76 at the end of January 2013.

The forecast calls for Detroit Three automaker sales to fall 0.4% from year-ago, to 473,000 units, and a combined 44.7% market share, versus 45.7% of year-ago sales.

General Motors is expected to see a 4% drop in sales, with 187,000 deliveries in the month, accounting for 17.7% of the market. Ford is forecast at 4.5% below year-ago, with deliveries falling some 7,000 units year-over-year to 155,000, for a projected 14.7% sales share.

Chrysler, aided by the popularity of its new Cherokee, could see sales jump nearly 11% from year-ago levels, with deliveries in excess of 130,000, giving the automaker a 12.3% market share.

The forecast looks for Asian automakers to account for 45.2% of monthly sales on total deliveries of 478,000 units, up 2.2% over year-ago. Toyota’s expected 149,000 January deliveries would put the automaker within striking distance of surpassing Ford in the month for the No. 2 spot overall. Honda is slotted at No. 5, with an expected 9.3% share on sales of just below 99,000 vehicles. Subaru again is expected to show the fastest growth among Asian automakers, with a projected year-over-year sales bump of 26.5% on 35,000 deliveries.

The WardsAuto forecast shows European automakers' market share falling below 10% for the month, with total sales of 105,000 LVs, up 8% over year-ago. Daimler brands are forecast to lead the way, with projected deliveries of 28,000 units, followed by BMW and Volkswagen.

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