Forecast: SAAR Could Reach 17 Million for Second Time in Four Months

A WardsAuto forecast calls for U.S. light-vehicle sales to reach a 17 million-unit seasonally adjusted annual rate for just the second time since 2006, after crossing that threshold most recently in August, when deliveries equated to a 17.4 million SAAR. The WardsAuto report is calling for 1.29 million light vehicles to be delivered over 25 selling days. The resulting daily sales rate of 51,461 units represents an 8.1% improvement over same-month year-ago (over 26 days) and a 9.1% month-to-month gain on October (27 days), slightly ahead of an average 6% October-November gain over the past three years. The 17 million-unit SAAR would be significantly higher than the 16.3 million recorded year-to-date through October, and would help bring 2014 sales in line with WardsAuto’s full year forecast of 16.4 million units.

The falling unemployment rate, which fell to a new 5-year low of 5.8% in October according to The Bureau of Labor Statistics continues to be a strong positive factor in WardsAuto’s industry forecast, as does consumer sentiment as measured by the Conference Board Consumer Confidence Index and Thomson Reuters University of Michigan Survey of Consumers, now at a seven-year high.

Automakers finished October with 3.5 million units in inventory, equating to a 68 days’ supply going into November, providing some additional upward pressure on sales.

The emergence last year of the Thanksgiving “Black Friday” weekend as a focus of auto sales and initiatives for some OEMs took many forecasters and competitors by surprise in 2013. However, month-end activity is widely expected to reach and exceed year-ago levels, as most manufacturers join the early holiday selling fray.

WardsAuto is forecasting an 11.1% year-over-year rise in Detroit Three daily sales – accounting for a combined 44.7% of industry LV volume.

The gain, again, largely is due an expected jump in Fiat Chrysler sales this month. The report calls for FCA to deliver 163,000 LVs, a 20.4% DSR increase that equates to a 12.7% share.
Ford is expected to better its daily sales by 8% compared with a relatively weak year-ago result, with strong fleet sales pushing the automaker’s LV deliveries near 193,000.

General Motors is forecast sell some 219,000 light vehicles, for a 7.5% uptick and a 17% share.

Only Hyundai Group should see a year-over-year drop in daily sales this month, with forecast volume of less than 94,000 vehicles equating to a 4% falloff from year-ago’s DSR. However, Asian automakers collectively are expected to improve on year-ago DSR by 5.7%, with Toyota deliveries rising 7.1% on a volume of 183,000 units. Honda, spurred by large supplies of its Civic and Accord cars, is forecast to improve nearly 10% over year-ago, with more than 123,000 deliveries.

Overall, European brands will see daily sales rise 5.7% over a strong-year-ago result, with a total volume of 135,000 units.

At forecast levels, year-to-date LV sales through November would come to 14.93 million units, up 5.3% over same-period 2013.

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