J.D. Power and Associates Reports: July New-Vehicle Retail Sales Indicate Slowing in Market Deterioration

Cash for Clunkers Program Has Had Minimal Impact to Date
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DETROIT, July 24, 2009 /PRNewswire/ – Although new-vehicle retail sales in July are projected to decrease 19 percent from July 2008, this marks an improvement in year-over-year declines observed for the first half of 2009, according to J.D. Power and Associates, which gathers real-time transaction data from more than 10,000 dealerships across the United States. Sales for the first half of 2009 are down 32 percent from the same period in 2008.

Based on the first 15 selling days of the month, new-vehicle retail sales for the month of July are expected to come in at 780,500 units, which represent a seasonally adjusted annualized rate (SAAR) of 8.2 million units. While July’s selling rate is down by 4 percent compared with June, this pace remains consistent with the first half of 2009.

Although July retail sales have declined compared with June, fleet sales have improved slightly after several months of weakness and production cuts. As a result, the July SAAR for total vehicle sales increases to 10 million units.

  J.D. Power and Associates U.S. Sales and SAAR Comparisons – July 2009

                  July 2009(1)             June 2009           July 2008
                 —————           ———           ———
  New-vehicle     780,500 units
   retail        (19% lower than
   sales            July 2008)           730,600 units       967,500 units
  ———–    —————         ————-       ————-
  Total vehicle   905,500 units
   Sales         (20% lower than
                    July 2008)           857,952 units      1,130,829 units
  ————-  —————–     —————–  ——————
  Retail SAAR    8.2 million units     8.5 million units  10.2 million units
  ———–    —————–     —————–  ——————
  Total SAAR     10.0 million units    9.7 million units  12.5 million units
  ———-     ——————    —————–  ——————

  (1) Figures cited for July 2009 are forecasted numbers based on the
      first 15 selling days of the month.

“Retail sales for 2009 are expected to be only incrementally affected by the Cash for Clunkers program, as many consumers don’t understand the specifics of the program, and if they do, they often find they don’t qualify for the incentive,” said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. “However, there is potential for increased sales in the short term as a result of select OEMs boosting incentives to match the program.”

To date in July, the Cash for Clunkers program appears to be affecting segment mix, particularly in an environment with gas prices pulling back from recent increases in June. Retail market share for compact vehicles has increased to 39 percent, up approximately 2.5 percentage points from June. The shares for midsize and large vehicles have decreased, with the exception of large pickups, which are up by 0.5 percentage point. This increase in large-pickup share can be attributed to the improved fuel economy of today’s pickups, compared with those being traded in.

J.D. Power and Associates is maintaining its forecasts for 2009 at 8.3 million units for retail sales and 10.0 million units for total sales. The current sales trend suggests the likelihood of a flattened recovery in the second half of the year.

“Given a sputtering but improving economy, the Cash for Clunkers program and manufacturer incentives, it appears that consumers are taking a wait-and-see approach,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “Favorable responses from consumers to these factors will be critical to market recovery in the second half of 2009.”

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE:MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com/.

J.D. Power and Associates Media Relations Contacts:
John Tews; Troy, Mich.; (248) 312-4119; media.relations@jdpa.com

Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103;
media.relations@jdpa.com

Source: J.D. Power and Associates

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