U.S. light-vehicle sales results are expected to track above the year-to-date pace for the third straight month in November, leaving open the possibility that 2016 still could finish with record volume.
With an upward bias, November sales are forecast to end at a 17.7 million-unit seasonally adjusted annual rate, the third consecutive month the SAAR finished above the year-to-date total, which stands at 17.3 million through October.
The forecast SAAR is below like-2015’s 18.1 million and October’s 17.9 million.
However, because there are two extra selling days (25) in November compared with last year, the forecast volume of 1.367 million units is 3.3% above same-month 2015’s 1.323 million. If November’s outlook holds firm, year-to-date volume will total 15.8 million units, a smidgeon above 11-month 2015’s 15.7 million, but keeping the prospect alive that 2016 could end as a record year.
Regardless of whether 2016 posts a new high, the signs still point to a plateauing in demand, with the likelihood of a decline next year – albeit a mild downturn, based on WardsAuto forecast of 17.2 million units in 2017.
The month’s forecasted daily selling rate of 54,696 is 4.9% below November 2015, and the third decline in the past four months. Also, November’s forecasted SAAR will be the fourth straight year-over-year decline.
November’s results largely will be determined by how much Thanksgiving promotions juice volume from the holiday weekend through the end of the month.
Incentives also are expected to rise slightly from October, and maintain the strong year-over-year increases that occurred in the past two months, based on data from TrueCar.
Thus, combined with recent good economic news related to jobs, income and inventory, and indications LV sales started out the month strong, heftier incentives and holiday bargains are likelier to push results higher rather than lower, if the forecast is off the mark.
A potential dampener to the month is fleet deliveries. Estimated raw volume has declined for two consecutive months and could drop again in November, as more automakers show signs of pulling back from using fleet sales as a way to maintain market share.
WardsAuto is forecasting 2016 to end ahead of 2015. An initial look at December points to a 17.8 million SAAR. Based on the November-December projections, sales will end the year slightly above 17.4 million units, barely topping 2015’s record volume of 17.396 million.
Stronger sales also will keep inventory levels from getting unreasonably high as the industry adjusts to the end of seven years of growth.
U.S. dealer stocks are forecast to end November at 3.85 million units, which equates to a 70 days’ supply, a healthy total for November. Strong December sales and planned production slowdowns point to the industry heading into 2017 in a good position to keep stock levels under control if demand begins to slide as expected.
Based on DSRs, General Motors is expected to eke out a second consecutive year-over-year gain. Among the remaining major players, only Hyundai-Kia is forecast for a gain. FCA US, Ford, Honda, Nissan and Toyota all are forecast for declines in November.