The auto market finished November very strong, more than making up for the temporary retail setbacks experienced in October due to Superstorm Sandy.
November’s 15.5M SAAR (seasonally adjusted automotive sales rate) is the highest pacing the car business has seen in nearly five years. Should this pace continue through December, US vehicle sales will post a third consecutive double-digit gain for the year.
1. Detroit Up, Share Down
Big 3 automakers continued a year-long theme of increasing sales year-over-year while losing share to imports. Chrysler (+14%) once again showed the largest year-over-year percentage gain over 2011, while Ford (+6%) and GM (+3%) gave up more ground. The Big 3’s overall gain versus November 2011 came in at 7.1%, less than half the market’s +15% pace. The moral here is that domestics will need help heading into 2013. With all the positive news about the US automotive market’s upward momentum, what tends to get lost in the shuffle is that Detroit has given up 4-5 points of share in about 12 months. Make no mistake: Import gains are the primary driver of today’s plus market.
2. Doubling Up
BMW (+39%), Honda (+39%) and VW Group (+31%) all grew at a pace that doubled the overall US market’s growth, while Subaru continued it’s acceleration in ’12 with a 60% year-over-year gain for the month. Toyota was the only other major automaker to exceed the market’s pace for November, at +17%. With the exception of BMW, all of these brands are on pace to nearly double the market’s brisk gains for the year, with year-to-date increases ranging from 24% to 30%.
3. All Eyes on December
Many questions face auto dealers in 2012’s final month. Will auto sales continue to grow briskly toward pre-recessionary heights of 16M annual sales, or will the US market normalize in its growth? Will uncertainty about Washington’s handling of fiscal worries dampen the upward auto momentum? Has vehicle supply finally caught up with pent-up demand, or will inventory blips plague 2013? And most importantly for Detroit, what response do the Big 3 have to a year-long erosion of market share?
There’s no denying that 2012 will go down as a solid year for the US automotive retail market, as the rebound from Sandy was even stronger and more immediate than most analysts had projected. Still, many challenges await automakers and dealers in the early part of 2013, even on the heels of three consecutive years of double-digit recovery.
Use this information to gauge your local auto landscape versus the overall market. For example, a Honda dealer up 30% over November 2011 is actually trailing the brand’s trending by 9 points. Follow ESA on Twitter or Facebook to get your daily helping of market intel!
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.