Three Trends Through Three Quarters: The I’s Have It

ESA Car Keys | Automotive Market Intel
Through three-quarters of 2016, three things are very evident about this year’s auto market.

While September’s sales pace (SAAR) rebounded to 17.65M units from August’s drop, the bigger picture could be summed up in three prolonged trends during 2016: Imports, incentives, and imbalance.

First and foremost is the continued strength of imports versus domestic sales. The second is the erosion of profit margins, now amidst plateauing demand — leading to sustained reliance on incentives. The third is strong buyer preference for light trucks over passenger cars.


US Auto Market through 9 months | Source: WardsAuto InfoBank

Through nine months, we’ve seen Nissan (+5.4%), Subaru (+4.2%) and Fiat-Chrysler (+3.7) grab share, mostly at the expense of VW (-12.5%) and GM (-3.8%). Other imports increasing their wedge of the pie during 2016 include Honda and Kia (both at +3.3%).

Regarding the market’s slim profit margins, September was the third consecutive month that finished with incentives surpassing 10% of average transaction prices — at 10.2%. Should incentives revert to lower levels, the small gains in volume for the year (+0.4%) will likely dissipate.

Which leads us to the “truck vs car” balance — or imbalance. Demand for pickups, SUVs and CUVs rose 3.8% while cars saw a commensurate decline of 7.2%. This balance has seen a massive 4-point swing year-over-year. Four points may not seem huge, but that represents more than a half-million vehicle transactions moving from the car to the truck column. Trucks represented 61.2% of units sold in September.

Your ESA Car Keys recap follows.


Wards Auto and NADA MarketBeat

  • September SAAR: 17.65 units
  • September Units: 1.428M vehicles sold
  • Change: DSR* -0.7% | Volume -0.7% vs September 2015
  • Gainers (by Volume): Nissan +4.9%, Hyundai +4.1%, Subaru +3.5%, Toyota +1.5%
  • Laggards (by Volume): Ford -8.4%, VW -7.8%, FCA -1.1%

Be sure to visit NADA’s MarketBeat, or Wards Auto for a concise recap of the US automotive market.

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*DSR: Daily Sales Rate. A more reliable indicator of the pace of auto sales which accounts for actual car-selling days per month.
*SAAR: Seasonally-Adjusted Annual Sales Rate.
SOURCES: Wards Automotive InfoBank, NADA MarketBeat, Automotive News.


Dave Eckstein, ESA & Company | Real. Local. Results: 2012Dave 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.

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