IRVINE, Calif. — Kelley Blue Book www.kbb.com, the leading provider of new car and used carinformation, projects new-vehicle sales to reach 1,425,000 units, or 14.6 million seasonally adjusted sales rate (SAAR), in March 2012. This is a 24 percent gain from last month and a 14 percent gain from March 2011.
At more than 1.4 million units, sales will be the highest for any March since 2007, when industry sales topped 1.5 million units overall. March traditionally is a strong month as consumers cash-in their tax returns and head to dealerships for the latest model-year vehicles. Kelley Blue Book expects this March will be especially strong due to high consumer demand for fuel-efficient models and interest in popular redesigns such as the Toyota Camry, along with improving supply conditions and attractive finance opportunities.
In fact, in Kelley Blue Book’s Q4 2011 Consumer Sentiment survey of in-market car shoppers on kbb.com, 29 percent of respondents complained about a small selection of vehicles, while an additional 28 percent responded that they had difficulty finding the specific vehicle they wanted. Kelley Blue Book expects many consumers who delayed vehicle purchases due to a lack of selection late last year now will buy in March, as inventory conditions continue to improve. An abundant supply of new vehicles also will help entice used-car shoppers to consider a new vehicle, especially with late-model used-car values increasing at a rapid pace alongside high fuel prices.
“Although we anticipate strong sales in March, it will fall short of the 15.1 million SAAR posted last month,” said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book. “Sales in February were aided by unseasonably warm weather across the United States and an additional selling day due to the Leap Year, triggering a strong seasonally adjusted sales rate that will not likely repeat this year. Conditions in the economy have generally been positive through the first few months of the year, and if conditions remain steady, the industry can expect to see continued strength in sales for the months ahead. Rising fuel prices could slow down the current momentum in sales growth if left unchecked, so this will be a key factor to monitor moving forward.”
High Gas Prices Keep Fuel-Efficient Vehicles in High Demand
Fuel prices are above $3.80 per gallon nationally and as high as $4.40 per gallon in California. As fuel prices continue to rise, consumers will be most interested in fuel-efficient compacts and hybrids to seek relief from the pump. A recent survey of in-market car shoppers on kbb.com found that 51 percent of respondents are now considering a smaller, more fuel-efficient vehicle, while 20 percent are considering an alternative-fuel vehicle such as a diesel or hybrid. Luckily for consumers, there are more fuel-efficient offerings than ever before to help counteract the effect of rising fuel prices on the family budget. There are several subcompact, compact and hybrid cars that offer nearly 40 mpg on the highway, so consumers should have plenty of options as they head to the dealership this month.
“Subcompact car sales will be especially strong, since they are the most affordable vehicles in the marketplace today,” said Gutierrez. “Not only are they cost effective, but the subcompacts available for sale today are of significantly higher quality than those offered just a few years ago. The Ford Fiesta, Hyundai Accent and Chevrolet Sonic are new introductions that are reshaping the segment, while consumers also can look to traditional segment leaders such as the Honda Fit, Toyota Yaris and Nissan Versa for something more familiar.”
The Toyota Prius c is another small vehicle to watch. Demand for this hybrid vehicle has been white-hot since its introduction earlier this month, and with good reason. Prius c pricing starts below $20,000 and offers 53 mpg, making it an absolute bargain compared to most other hybrids. Expect strong sales in fuel-efficient segments to continue as long as fuel prices remain elevated.
|Rising Fuel Prices will Continue to Bolster Sales of Fuel-Sippers|
|Sales Volume||Market Share|
|Full-Size Pickup Truck||147,000||130,437||12.5%||10.3%||10.5%||-0.1%|
|*Includes segments not shown|
Toyota and Honda Continue to Increase Share as Inventory Levels Improve
Toyota and Honda have steadily regained market share during the past several months, and we expect this trend to continue in March. After hitting a low point of 10.2 percent and 7.6 percent market share respectively in mid-2011, Toyota and Honda have bounced back. Toyota and Honda accounted for 13.9 percent and 9.6 percent of all February sales (respectively), significantly above their 2011 lows. Inventory levels have continued to climb steadily in recent months and as a result, Kelley Blue Book expects both brands to continue gaining market share in the months ahead. Toyota and Honda likely will have the most significant gains with their fuel-efficient offerings. Toyota will look to the newly redesigned Toyota Camry and the 50-mpg Prius family to help bolster sales in March, while Honda will rely on the redesigned Honda Civic and CR-V to boost their March totals.
|Solid Sales Gains Year-over-Year Expected for All Manufacturers|
|Sales Volume||Market Share|
|Ford Motor Co||225,000||212,295||6.0%||15.8%||17.0%||-1.2%|
|Toyota Motor Co||199,500||176,222||13.2%||14.0%||14.1%||-0.1%|
|*Includes brands not shown|
For more information and news from Kelley Blue Book’s kbb.com, visit www.kbb.com/media/, follow us on Twitter at www.twitter.com/kelleybluebook (or @kelleybluebook), or like our page on Facebook at www.facebook.com/kbb.
About Kelley Blue Book (www.kbb.com)
Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the only vehicle valuation and information source trusted and relied upon by both consumers and the industry. Each week the company provides the most market-reflective values in the industry on its top-rated website www.kbb.com, including its famous Blue Book® Trade-In and Suggested Retail Values and Fair Purchase Price, which reports what others are paying for new cars this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies as well as governmental agencies. Kbb.com provides consumer pricing and information on minivans, pickup trucks, sedan, hybrids, electric cars, and SUVs. Kelley Blue Book Co. Inc. is a wholly owned subsidiary of AutoTrader.com.