Kelley Blue Book: March New-Car Sales To Reach Highest Levels Since 2007

Kelley Blue Book www.kbb.com, the leading provider of new car and used car information, 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

IRVINE, Calif., March 22, 2012 /PRNewswire/