Black Friday promotions bolster sales gains; industrywide incentives up 6% from last year
TrueCar, Inc. (NASDAQ: TRUE) projects total new vehicle sales, including fleet deliveries, will reach 1,352,500 units in November, a 3.9 percent increase from a year ago and the highest ever for the month.
The expected growth will push the seasonally adjusted annualized rate (SAAR) for total light vehicle sales to 18.6 million units, the strongest pace of any month so far this year and up from a 17.1 million-unit SAAR year ago. Solid consumer demand coupled with Black Friday campaigns may boost retail sales by 3 percent to 1,157,800 units.
“This continues to be a standout year for the industry, with November sales likely setting a monthly record,” said Eric Lyman, TrueCar’s vice president of industry insights. “Consumers are excited about Black Friday promotions and these month-long events appear to be resonating with car buyers. Brands that advertised early, Chevrolet, Hyundai, Jeep and Ram, are expected to outperform the industry.”
General Motors is currently running a Black Friday promotion for its Buick, Chevrolet and GMC brands, promoting savings of as much as 20 percent off MSRP. FCA’s Chrysler, Dodge, Jeep and Ram brands are all running Black Friday promotions advertising no-interest financing for up to 75 months. Hyundai is also participating in the early Black Friday promotions with customer cash offers.
Hyundai may lead the charge in year-over-year sales gains with a 6.2 percent rise in volume, resulting in a best ever November for the brand. GM will likely follow with a 5.7 percent increase in sales. Ford and Toyota tie for third place, with both manufacturers expecting a 4.2 percent increase in sales.
Non-luxury volume will likely expand by 3.6 percent versus last year. Luxury cars and truck sales may grow by 5.2 percent compared to a year ago. Compact crossover vehicles remain very popular this month and will be among the industry’s biggest segments by volume.
“Automakers are striking while current economic fundamentals are favorable. With unchanged interest rates, low unemployment and consumer-friendly gas prices, manufacturers are willing to spend slightly more to reap large rewards,” said Stacey Doyle, TrueCar’s senior industry analyst.
Incentive spending by automakers averaged $3,066 per vehicle in November, up 6 percent from a year ago and down 1.1 percent from October 2015.
“This year incentive spending as a percentage of average MSRP is lower than what we saw from 2003 through 2006,” said Doyle. “During that period, higher incentive spending was used to artificially boost sales levels to keep the industry close to 17 million units. Overall, most automakers are showing restraint and not falling back into bad habits.”
Interest rates remain unchanged and overall U.S. economic conditions are still strong. The unemployment report in October was 5 percent, the lowest for the month in eight years. Gasoline prices also remain favorable, falling to a national average of $2.07 per gallon on November 23 from $2.82 a year earlier. However, the Conference Board’s Consumer Confidence Index® declined by 5 points in October from a month earlier to 97.6.
Other key findings for November:
- Expected registration mix of 85.6 percent retail sales and 14.4 percent fleet versus 86.3 percent retail and 13.7 percent fleet last November.
- Total used auto sales, including franchise and independent dealerships and private-party transactions, may exceed 2,704,873, up 1 percent compared to November 2014.
Forecasts for the 12 largest manufacturers by volume:
Total Unit Sales
| Manufacturer | November
2015 Forecast |
% Change vs. November 2014 | % Change vs. November 2014
(Daily Selling Rate) |
| BMW | 36,000 | -0.2% | 8.4% |
| Daimler | 38,100 | 0.5% | 9.2% |
| FCA | 179,100 | 4.1% | 13.2% |
| Ford | 194,100 | 4.2% | 13.2% |
| GM | 238,600 | 5.7% | 14.8% |
| Honda | 122,300 | 0.4% | 9.1% |
| Hyundai | 57,000 | 6.2% | 15.4% |
| Kia | 45,200 | 0.6% | 9.3% |
| Nissan | 107,400 | 4.1% | 13.1% |
| Subaru | 44,500 | -1.7% | 6.8% |
| Toyota | 191,000 | 4.2% | 13.2% |
| Volkswagen Group | 54,200 | 1.3% | 10.1% |
| Industry | 1,352,500 | 3.9% | 12.9% |
Total Market Share
Manufacturer |
November 2015 Forecast |
November 2014 |
October 2015 |
BMW |
2.7% |
2.8% |
2.3% |
Daimler |
2.8% |
2.9% |
2.2% |
FCA |
13.2% |
13.2% |
13.5% |
Ford |
14.4% |
14.3% |
14.6% |
GM |
17.6% |
17.3% |
18.1% |
Honda |
9.0% |
9.4% |
9.0% |
Hyundai |
4.2% |
4.1% |
4.1% |
Kia |
3.3% |
3.5% |
3.4% |
Nissan |
7.9% |
7.9% |
8.0% |
Subaru |
3.3% |
3.5% |
3.5% |
Toyota |
14.1% |
14.1% |
14.0% |
Volkswagen Group |
4.0% |
4.1% |
3.6% |
Retail Unit Sales
Manufacturer |
November 2015 Forecast |
% Change vs. November 2014 |
% Change vs. November 2014(Daily Selling Rate) |
BMW |
34,900 |
-1.4% |
7.2% |
Daimler |
36,600 |
-0.8% |
7.8% |
FCA |
137,600 |
1.9% |
10.8% |
Ford |
148,100 |
4.6% |
13.7% |
GM |
187,500 |
6.9% |
16.2% |
Honda |
121,200 |
0.1% |
8.8% |
Hyundai |
47,000 |
11.7% |
21.4% |
Kia |
39,200 |
-2.2% |
6.4% |
Nissan |
95,400 |
0.2% |
8.9% |
Subaru |
41,100 |
-6.2% |
1.9% |
Toyota |
178,700 |
3.5% |
12.5% |
Volkswagen Group |
47,686 |
0.0% |
8.7% |
Industry |
1,157,800 |
3.0% |
12.0% |
Incentive Spending
Manufacturer |
Incentive per Unit November 2015 Forecast |
Incentive per Unit % Change vs. November 2014 |
Incentive per Unit % Change vs. October 2015 |
Total Spending November 2015 Forecast |
|
BMW |
$4,661 |
-0.8% |
-6.7% |
$167,324,848 |
|
Daimler |
$4,801 |
-7.5% |
-2.1% |
$182,927,905 |
|
FCA |
$3,573 |
12.6% |
0.1% |
$634,848,468 |
|
Ford |
$3,360 |
3.3% |
-0.9% |
$652,271,564 |
|
GM |
$3,739 |
6.1% |
-3.6% |
$892,213,512 |
|
Honda |
$1,931 |
-6.3% |
1.1% |
$236,122,190 |
|
Hyundai |
$1,991 |
13.0% |
-3.9% |
$113,514,834 |
|
Kia |
$2,924 |
4.9% |
-0.6% |
$132,177,770 |
|
Nissan |
$3,577 |
3.0% |
0.4% |
$384,211,539 |
|
Subaru |
$689 |
-3.7% |
-0.8% |
$30,676,056 |
|
Toyota |
$2,204 |
13.8% |
-3.0% |
$420,924,683 |
|
Volkswagen Group |
$3,747 |
27.0% |
-2.7% |
$201,987,616 |
|
Industry |
$3,066 |
6.0% |
-1.1% |
$4,134,869,335 |
|
(Note: This forecast is based solely on TrueCar’s analysis of industry sales trends and conditions and is not a projection of the company’s operations.)
