US light-vehicle sales grew 1.4% year on year (y/y) in November and 5.4% y/y in the year to date on the continuing market conditions of recent months and heavily advertised 'Black Friday' incentives. Preliminary estimates of the seasonally adjusted annualised rate (SAAR) were 18.12-million units.
IHS Automotive perspective
Significance
November's US light-vehicle sales increased 1.4% year on year (y/y), with the seasonally adjusted annualised rate (SAAR) estimated at 18.12 million units - the fourth consecutive SAAR over 18-million units. In the year to date, sales grew 5.4%.
Implications
This year is showing promise of reaching a highest full-year US sales volume since 2001, though with Mercedes-Benz not reporting until 2 December, the latest report is preliminary.
Outlook
While the streak of four consecutive months of improving SAAR sales may be in jeopardy, this marks the first time that the figure has been above 18 million units for three consecutive months. November's demand was boosted by month-end 'Black Friday' sales and heavy advertising of the deals, but incentives were available throughout the month. In addition, positive credit conditions and mostly upbeat economic news helped sustain the momentum of light-vehicle sales. With one month remaining in the calendar year, light-vehicle sales are sure to eclipse the 2000 volume record. We project 2016 and 2017 to continue breaking records with sales volumes of 17.8 million units and 18.2 million units, respectively.
US light-vehicle sales increased 1.4% year on year (y/y) in November, with the seasonally adjusted annualised rate (SAAR) estimated at 18.12 million units - the fourth consecutive SAAR over 18-million units. In the year to date (YTD; January-November), US light-vehicle sales grew 5.4% y/y.
Detroit automakers
General Motors (GM) has been executing a plan for an overall reduction in fleet sales of about 60,000 units over the second half of 2015, with November's results reflecting a 9% decline in overall fleet sales. The company's overall sales, however, increased by 1.5% y/y in November, and its more profitable retail sales were up 4%. In the YTD, GM sales were up 4.9% as the US consumer appetite for sport utility vehicles (SUVs) and trucks plays to the company's strengths. Buick is again the company's weakest performer; while sales of the Enclave and the Encore were up, overall the brand's sales fell 16.6% y/y in November and were down 3.0% y/y in the YTD. Cadillac sales gained 1.8% in November, though they were flat in the YTD, with the outgoing SRX taking a 52.7% y/y increase for the month. Chevrolet sales gained 4.8% y/y in November, and were up by the same figure in the YTD. Silverado sales picked up 3.4% y/y in November and the vehicle continues to be the company's highest-selling model. Equinox sales stayed ahead of those of the Cruze (down 29.7% y/y) for the second slot in Chevrolet's line-up; the Cruze is due to be replaced later in the year. High-margin GMC, however, saw its sales contract 1.9% y/y in November, as the Sierra's volume dropped 26.7% - a drop that was not overcome by Canyon sales. GMC remains strong in the YTD, however, up 11.1%.
Ford Motor Company's sales were flat y/y in November, increasing only 0.4%. In the YTD, Ford sold 5.0% more vehicles than in the same period of 2014. The numbers are similar for the Ford brand, with sales up 0.5% in November and 5.0% in the YTD, while the Lincoln brand saw a 2.4% decline in November; in the YTD, the premium brand's sales were up 6.6%. Lincoln's declines were on the MKC, with a comparison against a launch period showing, and on the Navigator; the recently updated MKX's sales gained 17.5%, however. Sales of Ford trucks gained 18.3% y/y for the month; although, as a revised Escape is about to be launched, utility vehicle sales were down 9.7% and car sales were down 12.6%. Mustang sales saw a decline in November, coincidentally the same month that Chevrolet's all-new Camaro reached dealerships.
FCA US reported its 68th consecutive month of y/y sales gains, though at a reduced 3.0% pace in November. In the YTD, the brand's sales were up 6.8%. Fiat Chrysler Automobiles (FCA) sold 143,496 truck and utility vehicles, compared with 32,478 cars in November; car sales were down 21.8% y/ and truck and utility sales up 11.0%. Ram pick-up demand was up only 1.5% in November, a smaller gain than the 2.8% y/y reported for October; in the YTD, the truck's sales were up 3.5%, compared with the Chevrolet Silverado's 13.9% gain and Ford's increase of 2.5% for the F-Series (constrained by a new-model production changeover). Fiat brand US sales continue to struggle, down 2.6% in November and 8.8% in the YTD. Sales of the 500 and 500L combined declined 61.6% y/y, too steep for the 500X to cover. Jeep accounted for 48% of FCA's US truck sales in November and 39% of overall sales, with a 20% y/y increase. Dodge brand sales dropped 7.5%; single-digit rate increases in sales of the Charger, Challenger, Durango, and Journey were not enough to offset a 31% decline in Dart sales.
Japanese automakers
Toyota's demand picked up 3.4% y/y in November, with YTD results up 4.7%. Toyota Division sales saw moderate growth of 2.8%, with 160,177 vehicles sold. Lexus sales gained 6.8% in November to 29,340 units, with the all-new NX bringing in 3,284 units. Toyota Motor Sales' truck and SUV products gained 5.5% y/y and car sales dropped 2.7%. Toyota Camry sales picked up 7.3%, holding its best-selling-car status for November and the YTD. With the iM and iA in showrooms, Scion saw sales grow 32.7%.
American Honda showed a decline in sales in November, with a 5.2% drop against a record performance in the same month a year earlier. The company's results have largely lagged the market throughout 2015, and in the YTD the company's sales were up only 2.3%. The Honda division saw sales drop by 3.5% and Acura's sales fell by 17.6%. Honda's declines were in the Fit and CR-V, while the Accord and Civic saw sales increase. Acura's car sales dropped by nearly 22%, and a decline in MDX sales pulled the division's SUV sales down. The Honda Civic's volume stayed behind the CR-V's by fewer than 1,000 units. The additive HR-V continues to see sales slide month by month, selling 3,505 units in November, compared with June's 7,760 units.
Nissan and Infiniti saw sales increase 6.0% y/y in November, with the Nissan division's sales up 3.9%. Nissan division car sales dropped 4.0% and truck sales increased by 15%, on strong performances from the Rogue and Murano. Infiniti demand was up 2.6%, with the Q50 keeping the lead over the QX60. Subaru claimed another record sales month, the 48th consecutive month of y/y growth; the Forester and Outback delivered 58.0% of November's sales, consistent with the previous month. Mazda reported an increase of 16.3% y/y in its November sales, though it was up only 3.2% for the YTD.
Other automakers
Volkswagen (VW) Group saw US sales contract 15.3% in November, in no small part due to the impact of the emission scandal and its inability to sell diesel-engine 2016 model-year products, an issue which expanded to include 3.0-litre V6 engines in Porsche and Audi products in November. VW brand sales dropped 24.7%, though Audi reported its 57th straight month of sales growth, up a marginal 0.4%. In November, Porsche sales dropped 5.3% y/y. Combined October sales for Hyundai (60,007 units) and affiliate Kia (54,552 units), which operate separately, reflected a 7.1% y/y gain. Hyundai gained 11.8 %, while Kia gained 1.4%.
Outlook and implications
November will bring the fourth consecutive month of a seasonally adjusted annualised rate (SAAR) of more than 18-million units, on initial US sales estimates. According to IHS Automotive sales forecast analyst Chris Hopson, end-of-month sales promotions and continued strong demand for light trucks of all sizes – especially crossover utility vehicles (CUVs) – pushed November's US light-vehicle sales to an estimated SAAR of 18.12-million units (finalised Daimler USA results will not be available until 2 December).
While the streak of four consecutive months of improving SAAR sales may be in jeopardy, this marks the first time that the monthly sales pace has been above 18 million units for three consecutive months. November's demand was boosted by month-end 'Black Friday' sales and heavy advertising of the deals, but incentives were available throughout the month. In addition to available incentives, undercurrents of positive credit conditions and mostly upbeat economic news helped sustain the momentum of light-vehicle sales. With one month remaining in the calendar year, US light-vehicle sales are sure to eclipse the 2000 volume record. We project 2016 and 2017 to continue to break records with volume projections of 17.8 million units and 18.2 million units, respectively.
There were 23 selling days this November, two less than the year-before period. On a unit volume level, an estimated 1.31-million light vehicles were sold, up 1.5% compared with year-before levels, and the highest November volume reading in 14 years.
Given the two less selling days and one less weekend in November this year compared with November 2014, year-on-year (y/y) growth figures for the month were smaller than the double-digit improvements realised by many of the manufacturers over the past two months, but nonetheless only a few automakers posted y/y declines. Industry growth for the month was paced by a 3.4% improvement at Toyota, while FCA sales were up 3.0%, boosted by Jeep brand light truck sales. Rounding out the top four, GM sales were up 1.5%, keeping pace with the overall market in November, while Ford sales were up a more moderate 0.3%. Strong sales of CUVs helped push Hyundai-Kia sales up 7.1% for the month, which led all OEMs in y/y growth, and Nissan sales were up 3.8%. On the flipside, Honda sales were down 5.2% in November, while the embattled VW Group's sales were down 15.4%.
The low fuel prices and continued popularity of CUVs helped boost light truck sales during the month; reflective of a pattern realised throughout 2015. For the month, light truck sector sales were up 9.5%, compared to a decline of 8.0% y/y in passenger car demand. For the month, light truck sales accounted for approximately 60% of total volume, up from a 55% sales mix in November last year, and trailing only July 2005 as the highest monthly light truck mix on record.
Even with the healthy sales growth rate in November, production remained strong and, for some automakers, month-end vehicle stocks were slightly higher than previous month's levels. Pockets of high inventories remain, although many of the hot-selling vehicles such as CUVs face some inventory pressure. November month-end inventory at Ford was up 43,000 units (85 days' supply) and at FCA was up 34,000 units (86 days' supply), both increased stocks compared with the previous month-end. GM's inventory was down approximately 15,600 units, ending the month with a 69-day supply.
About this article
The above article is from the IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. Further components of this service include competitor and country intelligence. Get a free trial.