Is momentum there for a year-end sales surge?
John K. Teahan Jr. is senior editor of Automotive News
Automakers are set to report November sales on Thursday and they are expected to produce the best selling rate of the year -- an estimated 13.4 million to 13.5 million units or so.
The SAAR this year peaked at 13.29 million units in February but slumped during the spring and summer before rebounding sharply this fall. Japanese-brand inventories are recovering, consumer confidence has hit the highest level since July, and Americans seem to be in a holiday state-of-mind to spend.
For clues about how November may play out, and what kind of momentum the industry will carry into December, let's take another look at October.
For new-car and light-truck sales, October can best be described as the month of the paradox. It was quite good, and it was very bad.
First the good: The seasonally adjusted average rate of sales was 13.26 million, the best since 13.29 million in February.
And the bad: Industry sales of 1,021,185 were the worst since February.
It seems contradictory, but the federal Bureau of Economic Analysis pours many factors into its SAAR. Its calculations sometimes bring a higher sales rate than actual sales would seem to warrant.
An October sales famine is not unusual; it has been occurring for at least 10 years. In earlier days, when the Big 3 introduced their new models in October, that was one of the best months of the year. Now, all manufacturers spring their new models when the vehicles are ready. The "model year" means less and less.
An indication of how bad October sales were: General Motors year-to-date sales were up 16 percent at the end of September. In October, GM sales were up only 2 percent over last. Fewer fleet sales were a factor.
And Ford Motor Co. was riding an 11 percent year-to-year gain through September. Its October sales rose only 6 percent.
The Chrysler Group countered the performance of its domestic rivals with a solid gain of 25 percent over last year. That speaks to the public's acceptance of the company's current models, and it also points to how awful Chrysler's sales were a year ago.
Trucks saved the day in October. Without the strong truck performance, overall sales surely would have dipped below 1 million. Trucks took 52 percent of the month's market.
Hey, weren't truck sales supposed to fall off the wall because of the high price of gasoline and the growing influence of the Greenies in all walks of life? Well, gas prices have moderated, and maybe the Greenies weren't as strong as once supposed.
Sales of pickups were up 9 percent last month, and SUVs gained 13 percent. Cars posted a modest 5 percent gain.
Total October sales of 1,021,185 exceeded last year's by 8 percent. Year-to-date deliveries for 10 months were 10,540,131, which was 10 percent higher than last year.
A bit over 2 million sales are needed in November and December to reach the Automotive News projection of 12.6 million for the year. It should be no problem. Dan Akerson, General Motors CEO, thinks 12.7 or 12.8 million are possible.
You can reach John K. Teahen Jr. at firstname.lastname@example.org.