By Cox Automotive
Boosted by year-end sales and extra selling days, light vehicle sales in the U.S. for December are expected to finish near 1.54 million, a 1.9% increase over last December. The gain is a bit misleading, however, as there are 28 shopping days this month, three more than last year and five more than last month. With that many extra days for vehicle shoppers to acquire new wheels, a volume increase is more than expected. When volume is viewed on a seasonally adjusted basis, the sales pace is forecast to fall to a 15.5 million seasonally adjusted annual rate (SAAR), down from last month and down nearly 7% from last December’s 16.8 million pace.
According to Charles Chesbrough, senior economist at Cox Automotive: “December new-vehicle sales should show a year-over-year increase thanks to the three additional shopping days. But concerns about the virus, more state-directed lockdowns, and the ongoing economic recession are likely to constrain holiday sales. The passage of more government stimulus this week is good news overall, but we do not expect a new government stimulus to impact the new-vehicle market in any noticeable way in December.”
December 2020 Sales Forecast Highlights
- New light-vehicle sales are forecast to increase nearly 30,000 units, or 1.9%, compared to December 2019. When compared to last month, sales are expected to rise nearly 350,000 units or nearly 29%.
- The SAAR in December 2020 is estimated to be 15.5 million, below last year’s 16.8 million levels, and a slight decrease from last month’s 15.6 million pace.
December 2020 Forecast
All percentages are based on raw volume, not the daily selling rate.
2020 Sales Benefit from Strong Retail Demand
Full-year 2020 sales are forecast to end down 15.3% from 2019. After a 34.1% drop in Q2, improvements in Q3 and Q4 salvaged what many in the industry thought would be a far worse year. 2020 will be the first year below 17-million sales since 2014. Still, as Cox Automotive Chief Economist Jonathan Smoke notes, “This year presented the economy and the auto market with incredible challenges. As we close the year, it is remarkable to see how well the industry performed. Retail vehicle sales will end the year down less than 10% despite losing six weeks of the most important time of the year.”
Smoke added, “Supply constraints likely prevented even better volume performance, but most manufacturers and dealers enjoyed improved profitability as a result of limited supply and robust demand. We enter 2021 still battling the COVID-19 pandemic, but the distribution of vaccines gives us confidence that the economy and the auto market will both see continued progress once we get through the winter.”
The Full Year 2020 Forecast
DISCLAIMER: The views expressed in this insight piece are those of the author and do not necessarily reflect the official policy or position of IndraStra Global.