J.D. Power: Auto Sales Start Slow In 2010

January 22, 2010
Bianchi Honda Dealership in Erie, Penn.

Bianchi Honda Dealership in Erie, Penn.

We've all heard the forecasts that car sales have reached their low-point, and that we'll soon be turning the corner. Car makers are cautiously optimistic for 2010, most forecasting around 12 million total sales for the year. But J.D. Power's early look at January's sales numbers tell a different story: things are still slow--slower than a year ago.

The data is preliminary, forecast off the first 11 sales days of 2010, but the picture painted isn't a bright one. Last January, during the depths of the sales plunge, the industry moved 562,619 units. This year, the figure is expected to barely crest 500,000 sales, a four-percent decline. That's also a huge 317,000-car decline from December 2009.

It's not all storm clouds on the horizon, however. Strong sales and an extra pair of sales days in December may have shifted some of January's volume forward, and the rate of purchasing increased over the 11-day period sampled, hinting that things may continue to pick up through the end of the month. Still, it's not the encouraging scenario of continued recovery many had hoped for.

The seasonally adjusted annualized sales rate (SAAR)--an industry figure that compares projected sales year-to-year--based on January 2010's figures is a low 7.9 million units, down from the already low 8.8 million units projected last January, and the 8.9 million units projected off December 2009 sales.

What does all of this mean for you? The tremendous sales incentives and deals offered through the end of last year may be extended for a few more months, at the least, for starters. It may also spell continued hardships for dealers, carmakers and the associated segments of the industry and economy as well.

J.D. Power is holding to its full-year forecast of 9.5 million retail sales and 11.5 million total sales (including fleet sales), however. As always, we'll keep our ears to the ground, but it looks like 2010 is shaping up to be at best only a slight improvement on last year's figures.

[J.D. Power]

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