December 1, 2017

November Auto Sales: A Slight 0.9 Pct. Increase of Nov. 2016, Beating Expectations of a Decline

Filed under: Economy — Tom @ 8:05 pm

Predictions were for a 0.2 percent decline.

Given this year’s year-to-date decline, this is about as much a relief as it is cause for celebration.

Per the Associated Press, “Some analysts initially predicted that November sales would drop as post-hurricane sales slowed in Texas and Florida. But Black Friday promotions – which began in early November – helped lure buyers to dealerships.”

The discounting and use of incentives has been extraordinarily aggressive, with AP predicting that “The trend will likely continue in 2018, when U.S. sales are expected to drop and automakers will be keen to hold on to their market share.” Well, November defied the expectations of a decline, so maybe the pessimism is unwarranted. A return to decent but not necessarily stellar unit sales growth in 2018 is probably a prerequisite for a return to the kind of long-term economic growth everyone would like to see return.

There is definitely good news for the top line in November’s overall results:

  • Car sales, at 487,000 declined by 44,000, or 8.2 percent, from last November.
  • Truck sales, at 906,000, beat the November 2016 total by 56,000, or 6.6 percent.
  • That combination not only nets out to a 0.9 percent unit sales gain, but it almost certainly means that total revenues increased by far more than that.

At the individual maker level:

  • General Motors’ slow-motion contraction continued (down 2.9 percent, down 1.2 percent for the year, with a YTD market share of only 17.2 percent).
  • Ford reversed its fortunes, with a 7.0 percent increase in November. It was the only one of the traditional Big Three to show increases in cars (2.0 percent) and trucks (8.4 percent). Still, Ford is down 1.1 percent for the year, and needs to show improvements similar to November’s for at least several more months.
  • Who let the air out of Chrysler’s tires? Not long ago, it was threatening Toyota for the number 3 spot, but now it’s trailing its Japanese competitor by over 20 percent. Its unit sales were down 4.2 percent in November, and are down 8.3 percent for the year. With only 13.3 thousand car sales in November (placing it 12th among all makers), it’s like they’re almost out of the car business. Unfortunately, truck sales, down over 5 percent YTD, aren’t picking up the slack.
  • Toyota had a rough month (down 3.0 percent overall, with a 10 percent decline in cars and only a 2.3 percent increase in trucks). Toyota’s mix has more cars than the market in general, which has to be a concern.
  • Honda (up 8.3 percent), Nissan (up 13.9 percent) both had very strong months.
  • Among the smaller makers, Hyundai (down 8.5 percent) and Kia (down 15.6 percent) took significant hits.
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