The party's not over yet: Market 'just keeps going'
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December 07, 2015 12:00 AM

The party's not over yet: Market 'just keeps going'

Analysts predict record streak of 17M-plus sales

Neal E. Boudette
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    Carter: "As good as it gets"
    Sprint to the finish

    It's been another good sales year, but it ain't over till it's over. As carmakers spring to the finish, here's a look at U.S. sales races involving brands, models and segments that are still undecided.

    LUXURY SWEEPSTAKES
    BMW extended its lead over Mercedes-Benz in November and looks positioned to grab the luxury-vehicle prize for the second year in a row.
     Jan.-Nov.Change
    BMW311,398+4.4%
    Mercedes-Benz308,885+4.2%
    Lexus303,221+12%
       
    WHO'S #2?
    Ford has another brand title locked up, but Chevy and Toyota are going at it pretty hard for the No. 2 spot.
     Jan.-Nov.Change
    Ford2,275,109+5%
    Chevrolet1,936,553+4.8%
    Toyota1,907,088+4%
       
    CROSSOVER-MANIA
    Crossovers (all sizes) will hurtle past 4 million sales for the first time in 2015. In fact, watch for crossovers to pass compact and midsize cars combined in 2016.
     Jan.-Nov.Change
    Compact and midsize cars4,286,225-0.7%
    All crossovers3,924,265+17%
       
    RAV4 REVS UP
    Toyota's compact crossover slipped by the Ford Escape last month and looks to cement its lead in December. The RAV4 also has gained ground this year on the best-selling compact crossover — Honda's CR-V.
     Jan.-Nov.Change
    Toyota RAV4283,546+16%
    Ford Escape278,538-0.7%
       
    PADDING PICKUP SALES
    The addition of GM's midsize trucks has the pickup category on track to outsell midsize cars in 2015. Meanwhile, compact crossovers are set to pass compact cars for the first time.
     Jan.-Nov.Change
    Pickups2,279,839+9.5%
    Midsize cars2,215,549-2.1%
    Compact crossovers2,183,284+11%
    Compact cars2,070,676+0.9%
       
    LAND ROVER VS. VOLVO
    Trying to top Volvo for the first time in the U.S., Land Rover had built a lead over its former Premier Automotive Group stablemate. But Volvo has staged a bit of a comeback in the fourth quarter.
     Jan.-Nov.Change
    Land Rover62,141+36%
    Volvo60,705+18%
       
    SMALL-CAR SHOOTOUT
    Kia is battling to defend its top spot in the subcompact car category.
     Jan.-Nov.Change
    Kia Soul134,974-0.3%
    Nissan Versa133,470+2.2%
       
    ACCENT ON THE ASCENT
    Hyundai's Accent is chasing the No. 3 spot in the subcompact car class (after Soul and Versa). It moved past the Sonic in November and also outsold the Fiesta last month by more than 1,600 units.
     Jan.-Nov.Change
    Ford Fiesta60,908+2.4%
    Hyundai Accent58,768+7.4%
    Chevrolet Sonic57,482-35.0%
       
    SPRINTER VS. PROMASTER
    Ram's commercial van has had a nice run-up on Mercedes' Sprinter this year, but the Merc slightly outsold the ProMaster in November and may hold off its rival for the year.
     Jan.-Nov.Change
    Mercedes-Benz Sprinter25,843+15%
    Ram ProMaster24,066+60%
       
    MISDIZE MATCHUP
    The Mazda6 outsold Subaru's Legacy by fewer than 1,000 units last year, but the Subaru has a slight edge going into the last month of 2015.
     Jan.-Nov.Change
    Subaru Legacy54,688+17%
    Mazda653,729+9.9%
       
    MIRAGE VS. RIO
    The rampaging Mitsubishi Mirage is close to catching the Kia Rio.
     Jan.-Nov.Change
    Kia Rio22,745-33.0%
    Mitsubishi Mirage20,253+30%

    U.S. auto sales could hit an all-time record this month, but that probably won't be the end of the party.

    In view of the steadily improving economy, rising consumer confidence and still-unsated replacement demand, dealers and manufacturers can expect at least two more years with annual sales reaching or exceeding 17 million cars and light trucks.

    "We think there's another good, solid 22, 24 months at this level," said Bob Carter, senior vice president of Toyota's U.S. auto operations. "The economics, the interest rates, the employment -- everything pretty much says that we should remain at this level" in 2016 and 2017.

    Analysts share that view. The National Automobile Dealers Association recently forecast 2016 volume of 17.7 million new cars and light trucks, and 2017 sales of 17.2 million. If that proves to be the case, it will be a first. The highly cyclical industry has never seen three consecutive years of sales over 17 million.

    "If you're not enjoying this industry [now], then you ought not to be in the car business," Carter added. "This is really as good as it gets." 

    November provided a demonstration of the market's strength. The 11th month of the year used to be one of the quietest, but last month's sales rose 1.2 percent to 1.32 million vehicles, making it the strongest November total since 2001. 

    Toyota Motor Sales U.S.A., Fiat Chrysler Automobiles and Nissan North America all saw growth of 3 to 4 percent. GM reported a rise of 1.5 percent, while Ford was essentially flat and Honda saw a 5.2 percent decline. 

    November's seasonally adjusted, annualized selling rate was 18.16 million vehicles. It was the third month in a row that the SAAR surpassed the 18 million mark, and the seventh month in a row that it was over 17 million. In only three months this year -- January, February and April -- was the sales pace below that level. 

    "We keep waiting for the bottom to fall out, but it doesn't happen. The market just keeps going," said Doug Waikem, whose family owns stores selling seven auto brands in Massillon, Ohio. "This is just a good, steady market right now." 

    Barring an unforeseen drop in sales this month, total volume for 2015 is on track to come in at around 17.4 million, the sales record that was set in 2000. 

    Another year or two at that level would give dealers and manufacturers a very healthy environment to operate in, but would still present some challenges. 

    One is that automakers will have to be precise in guessing which vehicles consumers will want to buy, and calibrate their production capacity accordingly, to avoid shortages or profit-killing incentive spending -- "how many sedans versus how many SUVs versus how many pickup trucks," Carter said. 

    Sales of light trucks, thanks to booming sales of small crossovers, increased 9.4 percent in November and represented 60 percent of the total market. Sales of subcompact crossovers such as the Buick Encore and Jeep Renegade more than doubled. 

    Pickup volume was driven by midsize models such as the Chevrolet Colorado. That segment's sales rose 17 percent. Full-size pickups, meanwhile, offered mixed results. Ford said it set a November record for F-150 sales; overall F-series sales rose 10 percent. But the GMC Sierra, Toyota Tundra and Nissan Titan all saw their sales slip from a year ago. 

    A steady, low-growth environment would be a dramatic change from the climate of a few years ago, when sales were increasing by a million units a year. Without much growth in overall sales, brands that have set goals of increasing their market share will have to do it by taking customers from competitors. 

    Nissan, for one, has vowed to expand its share to 10 percent of the U.S. market. So far this year, it has 8.5 percent. 

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