December Looks Good for Automakers
Ford's November sales were led by F-Series pickups while GM enjoyed robust growth across brands.
Automakers reported November U.S. light-vehicle sales on Dec. 1 that got help from incentive spending as well as two extra selling days compared with November 2015. Total sales rose by 3.6% year over year to about 1.38 million while the seasonally adjusted annualized selling rate, SAAR, was 17.83 million per Automotive News compared with 18.17 million in November 2015. TrueCar estimated November incentives increased 13% from November 2015 to $3,475 a unit. We expect December will be a good month as automakers clear out remaining 2016 model year inventory and heavily advertise holiday sales programs. We still think that due to rising supply of used vehicles coming from the off-lease market and already high penetration of leasing that the industry is done growing on a full-year basis for this cycle. We do not think a recession is imminent and we remain upbeat on U.S. auto demand because even if sales fall all the way to 16 million from the mid-17 million range they are at now, that is still a very healthy level for profitability across the supply chain.
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