December SAAR Forecast to Push Past 15 Million Again, Flirt With 16 Million

Continued Sandy payback and increased incentive spending in key segments in December should boost sales in a traditionally strong month.

John Sousanis, Director, Information Content

December 21, 2012

3 Min Read
December SAAR Forecast to Push Past 15 Million Again, Flirt With 16 Million

One month after crossing the 15 million-unit threshold for the first time since February 2008, the U.S. light-vehicle sales seasonally adjusted annual rate has a legitimate shot at reaching the 16 million mark.

U.S. auto makers will record 1.38 million light-vehicle deliveries in December, lifting the monthly SAAR to 15.7 million units, according to a WardsAuto forecast.

But a sales tally just 2% above expectations would push the SAAR to 16 million units for the first time since December 2007.

Payback and replacement sales related to October’s Superstorm Sandy, which helped boost November volume to 1.14 million, are expected to add as many as 30,000 units to December’s results.

Additionally, General Motors, which had accrued a 139 days’ supply of large pickups at the end of November, compared with the rest of the industry’s 91 days’, rolled out increased dealer and customer incentives on those vehicles. That should help drive demand in a month that already was expected to account for an outsized share of annual pickup sales.

Ongoing launch activity of new high-volume products, including the midsize ’13 Honda Accord and competitor Ford Fusion, should add oomph to the traditional year-end sales spree, as well.

Trepidation related to the potential “fiscal cliff” seems to be playing no role in the LV market at this point. The November Conference Board Consumer Confidence Index rose to a 54-month high, with short-term optimism and the labor picture improving from October to November.

Other indicators also continue to improve.

The national unemployment rate dropped to 7.7% last month, its lowest level since December 2008, as the economy added 146,000 nonfarm payroll jobs.

The National Association of Realtors reports sales of existing homes rose 14.5% in November over year-ago, while the median price climbed 10.1%. And new housing starts continue to track at 25% above 2011.

The December WardsAuto forecast calling for 1.38 million LV deliveries represents a 15.8% increase in the daily sales rate (over 26 selling days) from year-ago (27 selling days) and an 11.5% jump in unadjusted volume for the month.

Theforecast calls for GM to bounce back from November’s all-time low share of 16.4%, delivering north of 240,000 LVs for a 17.6% stake in the market. The auto maker’s DSR is seen rising 7.7%, largely on the strength of increased pickup sales.

Ford will likely bear the brunt of GM’s aggression in the pickup segment, holding 15.1% of the overall market, compared with 15.3% in November. Ford’s daily sales are expected to rise 5% over year-ago.

Chrysler is projected to improve its DSR 12.7% over year-ago on volume of 149,000 cars and light trucks. That should equal a 10.8% share.

Honda sales, reinvigorated with the launch of the Accord, could account for 10.4% of December sales, with 144,000 deliveries reflecting a 42% increase over its inventory-deprived year-ago results.

Toyota should maintain its 14.2% November sales share, delivering a little less than 200,000 LVs. Daily retail deliveries are expected to rise in line with recent average November-December upticks, but overall fleet volume may come in below recent levels this month, with some sales deferred until January.

Nissan, which considerably outpaced November expectations, in part as a result of Sandy-related transactions, likely will see a 0.6-point drop in market share to 7.7% this month, with projected volume of 106,000 units.

Hyundai-Kia has averaged a lower November-December bump in DSR than most of its competitors over the past several years and is expected to follow that pattern this month. Daily sales are forecast to rise just 3.4% from November and 7.8% from year-ago, giving the South Korean auto makers a combined 8% of the market.

The December forecast lifts expected full-year 2012 LV sales to 14.47 million units, a 13.6% improvement over 2011, in line with WardsAuto’s initial 2012 projections.

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About the Author(s)

John Sousanis

Director, Information Content, WardsAuto

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