Blog: Dave LeggettData - the importance of comparing like with like

Dave Leggett | 3 April 2003

Someone yesterday was in touch to say that while we were reporting a decline in US light vehicle sales of 0.3% in March (citing as source Ward's), Automotive News said that the decline was of the order of 4%. Which was right? Answer - both. The larger drop is a crude comparison of March's unit sales total over the same month of last year. But such a comparison is of limited value as the number of sales days in the respective months will vary according to how the calendar falls and the timing of public holidays. Last month had one less selling day than March 2002 - 'inflating' the March 2002 number and also the year-on-year percentage drop. Ward's strip that irregularity out and produce a 'daily sales rate' for each month and that showed March 2003 0.3% off March 2002.

Another way that some analysts choose to view sales data is to produce a 'seasonally adjusted annualised running rate' or SAAR - which achieves the same thing, expressing volumes for particular periods in annual market terms (eg 'the market in March was running at a SAAR of 16 million units' - JD Power, for example, report and use SAARs extensively). But there is the added advantage that with the seasonal variation stripped out, any period can be compared to another. For example, you can compare the March SAAR with the February SAAR, or the Q1 SAAR with Q4 last year and so on. The SAAR can also be graphed continuously to see how the trend is moving. But there can still be extraordinary factors that upset the comparative analysis, like snow storms and then there are product actions that can lift the whole market, the effects of incentives timings...which is where the skills of interpretation come in. Maybe I should stop there.

Check the tables in the link to see the March US light vehicle sales detail - reproduced courtesy of Ward's.


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