Consumer demand up in January

With a projected increase in sales, the auto industry is primed to have a successful January, according to a report from J.D. Power and LMC Automotive.

The report said new-vehicle sales for January 2014 are presumed to increase 3 percent from January 2013, totaling 847,000 for the month. John Humphrey, senior vice president of the global automotive practice at J.D. Power and Associates, said in a statement this is going to be a very robust year for the auto industry.

"We are forecasting January 2014 to have the strongest level of retail sales for a January since 2004, and transaction prices will be the highest on record for the month of January," Humphrey said. "In combination, the strong sales rate and record transaction prices are expected to result in record levels of consumer spending for the sector."

Improvements in other sectors
The seasonally adjusted annualized rate (SAAR) for January 2014 is also anticipated to rise from last January. The report stated the SAAR for retail sales is on pace to hit 13.1 million, 400,000 more from December 2013 and 300,000 more units than January 2013.

Consumer spending, which is an indicator for how sales will fare in the industry, are believed to increase by $1 billion from January 2013. This is due to higher prices for cars and a higher sales volume.

Humphrey said the compact CUV model is a hot sell. This segment of cars accounted for 16.3 percent of the industry's retail sales in January, which is a 3.5 percent jump from January 2013.

Production growth a contributing factor
Many of these sales are due to an increase in production in 2013. The report said North American production ended at 16.1 million, a 5 percent increase from 2012 or 750,000 more units. Auto manufactures who are looking to meet demands in 2014 can use manufacturing recruiters to help them hire experienced workers for the job.

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said 2014 is primed to be a stellar year.

"All systems are a go for a strong and stable U.S. auto market in 2014, with risk of not achieving modest growth diminished," Schuster said. "We look for economic growth, a robust level of lease maturities, 70 percent more new model launches and an increase in consumers' willingness to spend to be the major drivers of growth in 2014."