Smoother Road Around The Corner, J.D. Power Says

JD Power Spring is upon us, sort of. And usually that means auto sales are starting their mid-year bloom. But this, of course, is not "usual"-- and according to J.D. Power, March is following January and February down the cosmic toilet. Not for all brands, but when automakers report sales next week, it's a good bet most will.

The firm says in the first 17 selling days of March, sales were down by 40% versus the same period a year ago. The firm gets data from its Power Information System that gathers activity from some 10,000 dealerships nationwide.

The firm predicts that March new-vehicle retail sales will be 633,000 units, versus 1.07 million units a year ago. This is a slight improvement over last month, but not a meaningful comparison, since March is always better than February. It's also worth noting that those sales numbers do not include automaker sales to rental fleets. The firm says the March seasonally adjusted annualized rate -- which basically means extrapolating March retail activity to the rest of the year -- also presents a dour picture: 7.4 million units, actually less than SAAR for February, which was 7.7 million units. So much for last week's optimism on Wall Street.



The firm is projecting total March sales to be 798,000 units, or a SAAR of 9.2 million units. Again, for those who are not in the car business, SAAR doesn't mean multiplying March sales by 12, but using March sales as a basis for typical monthly retail fluctuation.

Still, the firm is guardedly optimistic. "While the automotive market is down 40% year-over-year through the first quarter of 2009, the remainder of the year continues to be an open question," said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. "We're still seeing economic headwinds and reduced consumer demand for new vehicles, making it a tough marketplace. However, we anticipate that improvements on Wall Street and a boost in consumer confidence will help to bring the market back."

J.D. Power says the segment that is experiencing the best growth is crossover utility vehicles -- up by 3% since March 2008 last year. That is no surprise, since consumers have been abandoning traditional body-on-frame SUVs in droves for the car-based utilities. The firm says traditional utility vehicles, compact car and mid-size car segments are generating the greatest year-over-year declines in segment share, all to the benefit of the proliferating crossover segment. The firm notes that nine new models have been introduced in the past year. This year, several more are coming to market.

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