November Auto Sales to Reach Monthly Record

TrueCar (NASDAQ: TRUE) projects total new vehicle sales, including fleet deliveries, will reach 1,352,500 units in November, a 3.9 percent increase from a year ago and the highest ever for the month.

The expected growth will push the seasonally adjusted annualized rate (SAAR) for total light vehicle sales to 18.6 million units, the strongest pace of any month so far this year and up from a 17.1 million-unit SAAR a year ago. Solid consumer demand coupled with Black Friday campaigns may boost retail sales by 3 percent to 1,157,800 units.

“This continues to be a standout year for the industry, with November sales likely setting a monthly record,” said Eric Lyman, TrueCar’s vice president of industry insights. “Consumers are excited about Black Friday promotions and these month-long events appear to be resonating with car buyers. Brands that advertised early, Chevrolet, Hyundai, Jeep and Ram, are expected to outperform the industry.”

General Motors is currently running a Black Friday promotion for its Buick, Chevrolet and GMC brands, promoting savings of as much as 20 percent off MSRP. FCA’s Chrysler, Dodge, Jeep and Ram brands are all running Black Friday promotions advertising no-interest financing for up to 75 months. Hyundai is also participating in the early Black Friday promotions with customer cash offers.

Hyundai may lead the charge in year-over-year sales gains with a 6.2 percent rise in volume, resulting in a best ever November for the brand. GM will likely follow with a 5.7 percent increase in sales. Ford and Toyota tie for third place, with both manufacturers expecting a 4.2 percent increase in sales.

Non-luxury volume will likely expand by 3.6 percent versus last year. Luxury cars and truck sales may grow by 5.2 percent compared to a year ago. Compact crossover vehicles remain very popular this month and will be among the industry’s biggest segments by volume.

“Automakers are striking while current economic fundamentals are favorable. With unchanged interest rates, low unemployment and consumer-friendly gas prices, manufacturers are willing to spend slightly more to reap large rewards,” said Stacey Doyle, TrueCar’s senior industry analyst.

Incentive spending by automakers averaged $3,066 per vehicle in November, up 6 percent from a year ago and down 1.1 percent from October 2015.

“This year incentive spending as a percentage of average MSRP is lower than what we saw from 2003 through 2006,” said Doyle. “During that period, higher incentive spending was used to artificially boost sales levels to keep the industry close to 17 million units. Overall, most automakers are showing restraint and not falling back into bad habits.”

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