After exhaustive study of the U.S. economy and buying patters, J.D. Power raised their U.S. sales outlook. From previously forecasted 11.7m units to 11.8m units. Rental car lots are seen to absorb a good chunk of the total. True retail sales are projected to be 9.7m units when the year is over. “Much of this is due to the increased fleet mix,” says Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. In May, J.D. Power is “looking for fleet sales to account for 24 percent of total sales.”
Power expects May new-vehicle retail sales to come in at a seasonally adjusted annualized rate (SAAR) of 9.2m units, down from April’s SAAR of 9.6m units. Fleet sales to the rescue: They are expected to push the total SAAR to 11.3m units, a tick above April’s selling rate of 11.2m units. Total light-vehicle sales for May are projected to rise 17 percent, compared to the dismal May a year ago. Fleet volume is forecasted to be up a whopping 52 percent from May 2009. All eyes on Memorial Day to make May sales more memoriable.
North American production for 2010 is forecasted to be at 11.2m units for the year, up 32 percent from 2009. NA capacity utilization is seen at 64 percent in 2010, up from 47 percent in 2009. In the industry, any capacity utilization below 80 percent is seen as a sign of losing money.