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Record Sales in November Thanks to Incentives, Light-Truck Demand

December 6, 2017 0 Comments

November saw U.S. auto sales up 1.4 percent, hitting a record 1,399,640 units. The reality was better than most forecasts, with the sales increase largely driven by light-truck demand and “fatter deals.”

November is only the second month of 2017 with light-vehicle sales on the up year over year: light-truck volume rose 7.4 percent, while car deliveries decreased by 8.8 percent.

Last month saw falling numbers for Toyota, Fiat-Chrysler, General Motors, and Hyundai-Kia.

The seasonally adjusted annualized sales rate (SAAR) came in at 17.55 million, higher than the 17.3 million forecast (the SAAR for November 2016 was 17.7 million).

“We won’t see a fourth quarter better than last year’s, but we can see positive momentum heading into 2018,” said Jonathan Smoke, chief economist for Cox Automotive.

The new-vehicle market in the U.S. was “off 1.4 percent through November” following “seven straight annual gains capped by a record 2016”.

“U.S. economic growth has stepped up and we expect the momentum will carry over to 2018,” said Mustafa Mohatarem, GM Chief Economist. “Employment continues to grow at a solid pace, wage growth will accelerate and consumer confidence just hit a 17-year high, so industry sales should remain strong.”

Brand Report

Nissan saw its sales rise 18 percent after a 19 percent increase at the Nissan brand. Infiniti had a 7.5 percent increase, with light-truck sales up 29 percent for both brands together. Nissan’s November sales came in at a record 122,959 driven by demand for the Rogue and Murano crossovers. Overall combined sales for Nissan and Infiniti rose by 5.2 percent.

Honda’s volume increased by 8.3 percent for a November sales record of 133,166. American Honda said that car deliveries were up 1.4 percent and light truck demand increased 15 percent last month. The company also said that sales went up 8.2 percent at the Honda Division even “with major competitors clinging to heavy incentives and financing deals to compete.”

Ford’s light-vehicles were up 7 percent, marking November as the third straight month of gains of 6 percent or more for the automaker. Deliveries were up 7.6 percent at Ford and down 5.5 percent at Lincoln.

General Motors saw sales fall 2.9 percent on “lower fleet shipments and flat retail demand”, with all brands posting declines. The automaker, which was “close to posting its first annual gain in U.S. market share since 2011”, had sales fall for a second month in a row. Of its brands: Chevrolet was down 1.1 percent, Buick was down 3 percent, GMC was down 5.8 percent, and Cadillac was down 13 percent.

Toyota had its largest drop since April, falling 3 percent, but sales climbed 0.2 percent for the year.

FCA’s November sales fell 4 percent and is still seeking its first sales increase for the year. Additionally, sales were down on lower fleet shipments and weaker volume at Jeep, Ram, and Dodge. Chrysler, the only marque to post a gain, climbed 14 percent. Retail sales rose 2 percent to 129,539 units while fleet deliveries were down 25 percent (25,380 units). Jeep fleet shipments fell a whopping 75 percent.

Volkswagen Group’s volume was down 1.6 percent, breaking a three month streak of gains for the automaker. Audi pulled through with an increase of 12 percent, adding November to the marque’s 97 month streak of gains.

Subaru and Mitsubishi saw volume increases of 0.8 percent and 25 percent, respectively. Kia’s volume dropped 16 percent (Hyundai down 9.4 percent), and Mazda’s deliveries fell 2.6 percent.

For luxury brands, “volume rose 1.7 percent at Volvo, 7.1 percent at BMW, 0.8 percent at Porsche, 1.6 percent at Mercedes (excluding cargo vans), and 20 percent at Land Rover. Deliveries dropped 9.5 percent at Jaguar,” according to Automotive News.

The auto industry expected a decline in overall volume, but last month took its spot as the best November on record with 1.39 million deliveries.

According to Edmunds, volume was up 3.5 percent behind “higher deals and even fatter discounts” on “higher-than-normal levels” of 2017 models. Sales were driven by the demand for light-trucks and crossovers, as well as the remaining replacements for vehicles affected by the hurricanes in Texas and Florida.

Low interest rates and lower gas prices, as well as steady job gains and “lofty U.S. equity markets”, also aided support industry sales, say automakers and analysts.

It “doesn’t hurt that automakers are starting to really sweeten the deals to clear out lingering 2017s and end this year on a high note,” said Edmunds analyst Jessica Caldwell.

On Friday, Cox Automotive forecasted U.S. sales at 16.6 million light vehicles next year. The National Automobile Dealers Association forecast was similar: 16.7 million new cars and light trucks sold in 2018.

“We expect 2018 to be a robust year,” said NADA Chairman Mark Scarpelli. “Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million. Because it means that, one, the market is stable, and two, that demand is still healthy.”

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