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Forecast: January Forecast Calls for Low Sales, High Inventory

Forecast: January Forecast Calls for Low Sales, High Inventory

After a record-high December, average daily sales are expected to plummet 26.0% moving into January.

The U.S. automotive industry is expected to a have a slow start in the new year, with January light-vehicle sales down 4.4% from like-2016. The WardsAuto forecast calls for 1.107 million LVs to be delivered over 24 selling days, resulting in a 46,109-unit daily sales rate compared with 48,226 in prior-year (also 24 days).

The lackluster outcome will follow record-high sales in December due to heavy holiday promotions at the end of the month, which created a pull-ahead effect on potential January sales. Average daily sales are expected to plummet 26.0% between the two months.

The resulting seasonally adjusted annual rate is 17.0 million units, well below the 18.3 million in the previous month and 17.4 million year-ago.

December inventory was 9.2% above same-month 2015, the biggest year-over-year gap since the summer of 2014. Weak sales in January will keep inventory levels high, 16.0% greater than year-ago. A 93-day supply is expected to be available at the end of the month, a major jump from 62 days in December and 77 in January 2016.

General Motors should sell approximately 185,000 units in January, a 9.1% drop from same-month last year. Ford is forecast to post a smaller decline of 2.5%, delivering just under 164,000 LVs. FCA US will take the largest fall among the major automakers, down 16.3% with 142,000 sales.

Of the top seven auto groups, only Honda is expected to exceed its January 2016 result, growing 4.4% to 105,000 units. Nissan should outsell Honda by a small margin, but its forecasted 105,000 deliveries would mean a 0.5% downtick from like-2016.

Rounding out the top automakers, Toyota will sell about 155,000 LVs, down 4.1%. Hyundai-Kia is expected to deliver 81,000 units, 2.4% less than January 2016.

WardsAuto expects 2017 to close at 17.3 million U.S. LV sales, below the 17.465 million seen in 2016 and 17.396 million of 2015.

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