TROY, New York (WWJ) – A strong first quarter has more analysts raising their sales projections for the full year.
LMC Automotive now expects companies to sell 15.4 million cars and trucks in the United States this year. This is the second time the forecasting firm has increased its forecast by 100,000 sales.
The latest increase comes as car buyers have faced a number of challenges, ranging from a snowy winter, to budget issues in Washington.
“All of that has really not stopped the consumer from purchasing vehicles,” says LMC analyst Jeff Schuster. “That’s a major driver of what we’re seeing.”
There are a number of positive underlying trends, including higher prices for used vehicles, and more vehicles coming off of leases.
“The strong used-vehicle prices we’re seeing are supporting new-vehicle demand and are reflective of the general pricing discipline being exhibited by new-vehicle manufacturers,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power and Associates.
“Industry sales are also benefiting from an increase in the number of maturing vehicle leases, a trend that will continue throughout 2013.”
J.D. Power forecasts that we’ll see a 35 percent increase in the number of vehicles that will come off of lease this year. Most of those 1.7 million cars and trucks will need to be replaced.
April sales are expected to remain strong. LMC estimates that sales will be up 7 percent over last year.
Analyst Jeff Schuster said LMC has kept its forecast conservative. He says they could raise it to 15.5 million sales if current trends continue.
“We’re now hitting, I think, some momentum, as we’re now looking at the economy starting to come along, the housing market starting to rebound.”