3 things we learned from December sales
|Jesse Snyder is editor of the opinion page at Automotive News.|
DETROIT -- See what a snowstorm or two can do to even a juggernaut of a sales rally?
A series of powerful snowstorms through much of the country kept enough buyers away from U.S. dealerships to make December's volume gain a mere technicality -- up 2,602 units, or 0.19 percent.
Oddly enough, even that little bit helps in the rounding game. In whole numbers, 2013's 15,582,136 sales total is 7.514 percent higher, rounded up to 8 percent. If December sales had exactly matched a year earlier, the annual gain would have been 7.496 percent, rounded down to 7 percent.
So what have we learned?
1. The recovery is not over. Even with a modest December finish, 2013 ended with a million-plus unit increase. That's four straight years we're up more than a million. Starting from 2009's ghastly 10.4 million low, the annual unit increases have been 1,158,875 in 2010, followed by 1,189,732 and 1,713,449 and this year's 1,089,044. Notice how close the 2013 gain is to 2010's? But with a base 4 million units higher, 2013's percentage increase is smaller.
In 2014, most forecasters expect light-vehicle sales above 16 million units. That would be a substantial gain, but closer to an extra half million than another million.
Still, five-year sales rallies are rare -- 1996 to 2000 was the only occurrence since the late 1920s -- so the projected 2014 growth is welcome.
2. The tailwind from external factors is fading. This long rally has been fueled by improving fundamental economic factors. But it's also in part been helped by extraordinary factors, such as record-low interest rates that cut consumer auto loan payments and let automakers offer financing and leasing incentives at very little cost.
Some strong winds at the back of auto sales will moderate to mild breezes this year: Interest rates are creeping slightly higher, pent-up demand is easing, credit availability won't expand much more.
3. We'll have to adjust to lower expectations. Since December 2009, U.S. auto sales have risen 46 of 49 months, including 27 double-digit gains. Volume in 2013 is almost 50 percent greater than it was in 2009. We'll have to learn to love any month with growth and realize a single down month isn't a tragedy.
You can reach Jesse Snyder at email@example.com.