We’re merrily motoring down the monthly sales expressway, scarcely a pothole in the past 60 reports. We opened the throttle in November and the road ahead looks clear and dry.
The whole industry is anticipating the latest milestones of progress along the way: 2014 will be the fifth straight year of higher sales, likely 6 million units above 2009 and the first year since 2007 to top the 16 million unit level.
Maybe we’re a bit bored reciting the woo-hoo list month after month.
So let’s put this into perspective.
In terms of the number of vehicles sold, this year ain’t that impressive. If we hit 16.4 million or 16.5 million, that’s still just the ninth-best year for U.S. deliveries, behind 1999 to 2006. Industry volume peaked at 17.4 million in 2000, which (admittedly only for mathematical purists, but I’m making a point) was last century.
So why does finishing ninth best in the last 16 years feel so good?
Because it’s an excellent year by almost any other measure: margins, net prices, production-sales balance, profitability -- and, oh yeah, that heady rush of we-didn’t-die-in-2009.
Let’s face it, that nine-year plateau of 16 million-plus years from 1999 to 2007 wasn’t all that great. Lots of volume but thin margins. Marked by overproduction balanced by runaway incentives, the definition of push marketing. After 2000, volume trailed off every year but two until culminating in the Great Crash of 2008-09.
Apparently, the auto industry learned a lot from the last decade. Virtually everybody continues to match production to so-called natural demand, using incentives carefully and tactically. Profits are flourishing. Average transaction prices -- that’s net after incentives -- continue to rise.
The longer everybody remembers the bitter lesson, the longer the good times will last.
I’ve experienced too many ups and downs to believe we have cured the business cycle. But I think the Great Recession imparted a lasting sting that will temper the excesses for years to come.
Let’s all hope I’m right about that.
Meanwhile, it’s a great time to be in the car biz.