J.D. Power: Second Half of January Shows Retail Weakness

It appears that a combination of downward pressures are to blame for a rather weak second half for January’s retail new-vehicle sales, according to J.D. Power and Associates, which said the seasonally adjusted annualized rate for retail sales likely won’t hit the 10 million-unit mark.

January kicked off to robust sales during the first half of the month, but the pace apparently dwindled significantly during the last two weeks, likely thanks to things like the extreme wintry weather, dampened marketing and incentives and the “payback” of a robust end-to-December finally starting to show up, said J.D. Power’s Jeff Schuster.

“The strength in retail sales from the beginning of the month has reversed during the past two weeks, slowing the momentum,” explained Schuster, who is the company’s executive director of global forecasting.

“There are a multitude of factors that could be driving the weakness: winter storms, delayed payback from the strong December close, and a pullback in marketing and incentives, as incentive levels are 12 percent lower compared with December,” he pointed out.

J.D. Power anticipates that the overall new-vehicle SAAR (fleet and retail included) for the month will likely hit somewhere between 11.5 million units and 12 million units.