November sales rose 1 percent from a year ago, sealing this year’s likely fate as the first to see a sales decline since the Great Recession. (Year-to-date sales are down 1.5 percent.) That’s no surprise, after a record seven years of increased sales. This year is still forecast to be the third year running with sales above 17 million. NADA’s year-end forecast is for 17.1 million.
The main factors driving down November sales were a continued drop in passenger car sales and lower fleet sales. Of course, lower fleet sales mean more attention to retail. And some consumers are buying nearly new, off-lease vehicles instead of new. But the low sales levels of the Great Recession still seem like a long way off, and some major automakers remain optimistic.
“U.S. economic growth has stepped up and we expect the momentum will carry over to 2018,” said GM Chief Economist Mustafa Mohatarem. “Employment continues to grow at a solid pace, wage growth will accelerate and consumer confidence just hit a 17-year high, so industry sales should remain strong.”
SUV sales continue to grow, especially small SUVs and crossovers. Light trucks, including SUVs, will account for nearly 64 percent of new light-vehicle sales in 2017, said NADA senior economist Patrick Manzi. Small SUV prices rose 3 percent, according to Kelley Blue Book. Partly because of the increase in SUV sales, average transaction prices reached a record $35,870 last month. But incentives remain high, at $3,692, up 4.6 percent from November 2016, according to ALG.
The lower sales are part of a trend, some analysts say. New-vehicle sales are moving toward a new normal of 15.5 million to 16 million a year, according to Barclays analyst Brian Johnson, as reported in USA Today. But NADA sees higher than that next year (see next article).Download Bulletin PDF