Edmunds.com has forecast 1,153,459 new cars and trucks will be sold in the US in January, for an estimated seasonally adjusted annual rate (SAAR) of 17.7m. This would be down 0.7% year on year and 31.5% lower than December 2016 sales. Kelley Blue Book reckons sales will be down 3% to 1.13m next month for an estimated SAAR of 17.4m.
“January had the potential of being a very slow month at dealerships, given the fact that auto sales shattered records in December,” said Jessica Caldwell, Edmunds’ head of industry analysis.
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“But January is shaping up to be a surprisingly healthy month. The economy continues to show signs of strength and consumers are feeling confident, boosting auto sales above initial expectations.”
Edmunds estimates retail SAAR will come in at 14.6m vehicles in January 2017, with fleet transactions accounting for 17.3% of total sales.
Meanwhile, Kelly Blue Book KBB analysts said they expected new vehicle sales to decrease 3% year on year to 1.13m in January 2017 with an estimated SAAR of 17.4m.
“After a record December capped a new record year of vehicles sales in 2016, January figures appear to be enduring a hangover effect, potentially falling more than half a million units from the previous month,” said senior analyst Alec Gutierrez.
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By GlobalData“However, January is typically the weakest month of the year for sales, as winter weather sets in and consumers recover from big spending over the holiday season. In addition, many potential sales were likely pulled ahead into December as consumers opted to take advantage of the ample inventory and incentives available industry-wide.”
KBB said incentive spending is a concern as it continues to rise across the industry, and another record in 2017 would likely require undisciplined sales tactics driven by incentives, leasing and longer loan terms. Its 2017 forecast calls for sales in the range of 16.8m to 17.3m units, a 1% to 4% decrease from 2016.
KBB expects retail sales to account for 79.2% of volume in January 2017, down from 79.9% a year earlier.
VW recovery?
“With multiple new products on the market and looking to put the diesel scandal in the past, Volkswagen Group should report large year-over-year increases, and start to gain back market share,” added Gutierrez. “While new cars like the Golf Alltrack and redesigned Audi A4 are contributing to the automaker’s growth this month, SUVs like the Tiguan and upcoming Atlas will have to become bigger players to help VW transition its sales mix toward the growing consumer preference for utilities.”
Honda
KBB thinks American Honda also should do well in January 2017 with expected growth nearing 5%. The manufacturer’s range of SUVs will be primarily responsible for the gains. Sales of Honda SUVs could increase 20%, highlighted by the just-redesigned CR-V and smaller HR-V.
SUV changes
Quietly growing in the second half of 2016, mid-size SUVs/crossovers look to be the second highest volume segment in January 2017, KBB said, buoyed largely by strong demand for utilities. Buyers who may have previously considered a large sedan or minivan are instead acquiring mid-size utilities for roughly the same price.
Compact SUV/crossover, the top segment in the industry, is expected to decline slightly in January, but still grow its share of overall sales. In 2017, the Toyota RAV4 and Honda CR-V could unseat the Camry and Civic to be the highest-selling vehicles in the industry, pickups excluded, which would be appropriately representative of the general trend of consumers shifting from cars to SUVs.
There are 24 sales days in both January 2017 and January 2016.
Analysis of megatrends and markets on just-auto’s QUBE database.
