DETROIT (Dec. 2, 2016) — After three straight monthly dips, U.S. light-vehicle sales rose 3.6 percent in November from a year earlier, helped by more generous deals and strong truck demand.
Ford Motor Co., American Honda Motor Co., Nissan North America Inc., Toyota Motor Sales USA Inc. and General Motors Co. posted increases in November as a rise in incentive spending helped put the industry back on a winning track.
Industrywide sales hit a record for the month — 1.38 million — easily topping the 1.33 million mark in Nov. 2001. Light-truck deliveries, behind double-digit increases in sales of crossovers and pickups, jumped 8.6 percent last month, while the car market continued to slump, with demand off 3.9 percent.
The seasonally adjusted, annualized sales rate remained strong but dropped to 17.83 million from this year's highest rate — October's 18 million — and the 18.1 million pace in November 2015, the second-strongest month of last year.
"That's a great, great market. Any time we're talking mid-17s, that's a wonderful market and a wonderful indication of where the North American economy is," said Bob Carter, vice president of automotive operations for Toyota Motor Sales U.S.A.
A 10-percent gain at GM and a 4.3-percent rise at Toyota marked their strongest advances this year. Nissan climbed 7.5 percent, while Ford ended a four-month skid. The Volkswagen brand soared 24 percent. Fiat Chrysler was the exception among major automakers, tumbling 14 percent as fleet deliveries shrank.
Continued demand for light trucks amid low gasoline prices helped boost automakers' results, as well as two extra selling days. Incentive spending last month, including Thanksgiving holiday deals, was up 13 percent vs. a year-earlier but down from October, according to TrueCar data.
The discounts were more generous on remaining 2016 car and truck models. GM dangled incentives that topped $10,000 on some Chevrolet Silverado pickups and Suburban SUV models. Some Hyundai dealers cut prices on 2016 car models by 21 percent to nearly 40 percent, and offered a $100 Visa reward card with the purchase of a new model as part of Black Friday deals.
What's more, November left the industry in a better position to top last year's tally of 17.5 million light vehicles. Sales through October were 0.3 percent behind their year-earlier pace after three straight monthly declines.
With November in the books, industry sales are running just 6,418 ahead of 2015's pace. If the industry manages to eke out an annual gain, 2016 would mark the first time in a century that U.S. sales topped year-earlier levels for seven straight years. Sales rose every year in a nine-year stretch through 1917.
Black Friday deals
The early launch of Black Friday sales events helped offset declines in fleet sales in November, said Eric Lyman, TrueCar's chief industry analyst.
“The retail sales environment remains strong for new car sales,” Mr. Lyman said. “Incentives are also down slightly [from October] as automakers begin to address supply side imbalances with planned reductions in vehicle production.”
Steady economic and job growth and the recent rise in U.S. equity prices have also encouraged consumers to make big-ticket purchases, analysts say.
Incentive spending by auto makers averaged an estimated $3,475 per vehicle in November, TrueCar estimates.
Mike Jackson, CEO of AutoNation Inc., the largest U.S. new-vehicle dealership group, said there is some relief among dealers and automakers now that the presidential election, and the uncertainty that the campaign cast over consumers, is over.
“I still think we're in a plateau,” Mr. Jackson said this week. “There is a point of diminishing returns when whatever you give at the front end in incentives comes off residual values at the back end. We're right at that tipping point.”
Jessica Caldwell, an analyst for Edmunds.com, said luxury vehicles and light-truck demand in December will determine whether the industry hits a new milestone.
“November sales have the industry well-positioned to set a new annual sales record this year, but a new record is far from guaranteed,” he said.
“Expect to see a flood of ads for holiday season sales events in the coming days and weeks, especially for luxury brands, trucks and SUVs. If we see any year-over-year lifts in these segments in December, then it's a good bet that the industry will top last year's record-high sales."
David Phillips is a reporter with Automotive News, a Detroit-based sister publication of Tire Business. Nick Bunkley and John Irwin of Automotive News contributed to this report.