December Auto Sales Jump To Record 18.4 Million SAAR As Light Truck Sales Surge

Tyler Durden's picture

After Ford warned that North American auto sales had reached a plateau a few months ago, December 2016 auto sales blasted through that plateau to reach all-time record highs.  At a seasonally adjusted selling rate of 18.4mm units, the December SAAR broke through the "plateau" of 18.0mm units set in November of last year...

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..and narrowly exceeded the all-time high 18.2mm SAAR level first set in September 2009 (with the exception of a couple of blips in the mid-80s).

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Meanwhile, every auto OEM blew through selling estimates for the month while GM's chief economist assured us that the "U.S. auto industry remains well-positioned for sales to continue at or near record levels in 2017.”

“Key economic indicators, especially consumer confidence, continue to reflect optimism about the U.S. economy and strong customer demand continues to drive a very healthy U.S. auto industry,” said Mustafa Mohatarem, GM’s chief economist. “We believe the U.S. auto industry remains well-positioned for sales to continue at or near record levels in 2017.”

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Light truck sales were the real winner of the month, surging nearly 13% on a seasonally adjusted annualized basis, as people went all-in on their bets against oil prices recovering in the near future.

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As Bespoke pointed out, Ford's sales of its F-Series pick-up truck reached a level in the last two months of 2016 that it had only hit one other time over the prior 20 years.

 

Meanwhile, car sales dropped 9.6%.

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Investors seemed to like what they saw.

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But it wasn't all great news.  GM massively exceeded their sales target, at least in part, courtesy of a 2.3% YoY increase in incentive spending which reached a level equal to 13% of the company's average vehicle transaction price.  With an average gross transaction price of $41,823, that means GM offered average discounts of $5,437 per vehicle.

Meanwhile, GM's inventory also increased 10 days YoY to 71 days of supply.  To put that into perspective, GM had 630,950 unsold cars sitting on dealer lots at the end of December 2015 but that rose to 844,942 cars as of December 2016, a 214,000 unit increase YoY.

And, overall industry inventory levels continue to hover near 5-year highs...

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As we've noted before, industry volumes continue to be propped up by low interest rates and deteriorating lending standards with term structures being stretched about as far as they can be. 

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XqWretch's picture

Sounds sustainable

DavidC's picture

Indeed. Tesla UP 5% today. WTF?

DavidC

hannah's picture

come on zero hedge i thought you were better then this....I DONT CARE ABOUT SEASONALITY. GIVE ME THE REAL NUMBER....

Paul Kersey's picture

A month ago, I just bought a loaded ford F150. MSRP was $32,000, and I paid $24,500 out the door. That's less than I paid for my last F150 in 1997. The truck is twice what I had, and gets over 21 mpg around town (light aluminum body and light 2.7 ltr turbo engine). They let it go so cheap that I had to buy.

evoila's picture

the last time i saw this many new cars on the road was approximately 2000.

new game's picture

i work the car and truck auctions and sales are brisk at resale wholesale. 3000 in 1500 sold/wk out. mpls/st. paul area.

as one dealer said "anybody can get financing".

and that is the story.

sign and drive

lol...

greenskeeper carl's picture

New cars and auctions are a different animal though.

 

And call me ignorant, but why in the fuck does the number of auto sales get "seasonally adjusted"? How many total were sold, and was it more than last year? thats all thats relevant.

schrock's picture

Maybe you missed the fine print. I can't find a newer f150 on eBay motors for less than $35,000. Where did you purchase it from and is it 4x4?

ATM's picture

It's December. Small biz owners like me just bought up light duty trucks so we can write the things off under Sec 179.

Traded my 2006 Ridgline for a 2017 withevery fucking option available. Just squeezed in about 25lbs over the 6000lb GVW limit to take the 25k deduction in 2016 tax year.

So far love the thing. Quiet, comfortable and gets 24.5mpg on the highway. 

hannah's picture

you got screwed paul kersey. my neighbor got a f150 for only $10,000 (seasonally adjusted) and he gets 200mpg (seasonally adjusted).........

TheRideNeverEnds's picture

I like my seasonally adjusted numbers like I take my whiskey, straight up and doubly adjusted.

booboo's picture

When little suzy came home from school and asked mommy what "Fucking" meant she replied, "thats where babies come from",  when Suzy asked what a blow job was mom replied, "Honey, thats where new cars come from"

ersatz007's picture

Pickup trucks for ISIS - fastest growing market segment

QQQBall's picture

are leases counted as sales? As I drive along the 405 Fwy I see really juicy leasing offers on the big billboards that line the roadside.  I have never owned a new car, but I see tons of VW Passats and Nissan Sentras & Altimas on the road.  Nisan must be giving some models away? 

besnook's picture

the leased cars are actually sold to the leasing company.  DO NOT BUY A NEW CAR. that is the stupidest decision anyone could make. buy older well maintained honda or toyota vehicles and run them into the ground. even with the maintenance it is much, much cheaper than owning or leasing.

new game's picture

plus at least 100000 dollars saved in a 40 year work life.

honda and toyota. drove a 2001 honda accord to auction today with 131m on it. it will run the lane and probably sell for 1000.

hello, what a fucking fantastic deal. car was quite, tight and ran great. everything worked.

almost every american car or truck at 150-200 are junk, complete x-mas tree dash(warning lights) and are falling apart.

fucking junk compared to hondas and toyotas.

fuck merican junk cars and trucks...

gatorengineer's picture

Speechless to understand where people are getting the money to buy 40k Chevies. Thats a 650 payment on 5 years at 0 APR.

Its the same folks renting the 2k apartments in Nashville, I know but I honestly cant see what jobs are paying this kind of salary these days....

A Nashville Teacher say 65K, a junior lawyer about the same, Nurse lucky to see 50k.  Union manufacturing, HA HA....

I dont understand.

 

Ace Ventura's picture

+100. I see the same phenomenon here in central Virginia. Oodles of brand new Silverado/Sierra, F150 and Rams rolling around. These ain't fleet models either, but fully loaded $45k+ variants.

That doesn't even include the 'higher end' areas, where beemers, benzes, lexus, and jags are like proliferating algae. Surely there can't be THAT many doctors and lawyers in such a small area bringing in enough lettuce to support that kind of volume?

Oh, and that doesn't even address the tyrannical PROPERTY TAX each one of these denizens is dutifully forking over every year on these rides....a tax which is based on the government's assessed 'value' of the vehicle. LMAO...for my 17 year old toyota celica base model, they quite literally insist it is still worth $3,500+.....which is about $2,000 over what ANY SANE person would offer.

Like you, I don't understand what alternate time continuum these people live in....

new game's picture

retired state pensions is the answer. lol. or 4 incomes per two worker household.

Countrybunkererd's picture

YEP!  as i said before my 2005 lexus was purchased new from a retired state trooper when he bought a new one in 2010 and probably another one in 2015... i am still driving the used one and will do so until i leave it on the roadside for the metal recycler to get it.

But that is still a small percentage even with the unbelievably bloated government we have.

ZeroIntelligence's picture

I left RVA in 2013 for the big city (go ahead and downvote now) but one of the best things about city life is that it can be car-free (no car for 4 years now!).  Even if I "owned" it debt-free in VA, I could look forward to car insurance, ridiculous property tax like Ace mentioned, annual safety inspection, oil and maintenance, parking, GAS, etc.  It's so much to keep up with, I don't know how multi-car owners do it.

new game's picture

minimalism is good! upvote!

ATM's picture

So you are like my kids in chicago. No cars, don't want them, but live in shitty three bedroom apartments with two other people, pay as much as a car payment for the train pass, then add on Uber/Cab fees, then add on all the overpriced bullshit to experience the urban lifestyle.

They ain't getting a better deal. They just don't have a car.

edifice's picture

$30k millionaires, taking out subprime auto loans. That's how it's done.

More Ammo's picture

I have $B in Zimbabwe dollars.   Does that count?

ATM's picture

And I have $1 Quadrillion Zimbabwe dollars just sitting on my desk. No Shit.

edifice's picture

I have a Z$100 Trillion note, somewhere.

Countrybunkererd's picture

Same as the housing crash.  I kept telling my wife that it is impossible to sustain starting in about 2003-4.  How can the people we work with have a house 2-3 times the price of ours, one or two, ok inheritance and all the other stuff possibly but 90% of them?  And their cars on top of it, bmw's, jags, etc all new.  and then BOOM.

Nothing ever changes.  One of the couples declared bankrupcy and bought a new car at a 13% rate.  Both of my cars are paid for and i STILL considered going without health insurance this year... mostly on principle because being forced to pay 15K for NOTHING in return is beyond disgusting, unless my heart blows out or something else that doesn't kill me comes about.

vq1's picture

anecdotal:

I recently bought a used subaru from the dealership. I bought the most stripped down base trim model. The guy selling it to me has a mechanical engineering degree and looking for work. 

Im sure I make more than him and have less debt, more net worth. But he was telling me about his "sweet," brand new, STI (performance model).

 

Sure Im a little saddened that I cant whip around a 300hp STI. But something tells me Ill hold onto my lil car longer than he will.....

VWAndy's picture

 ISIS prolly got all the trucks.

NurseRatched's picture

VW's sales up 20%???
I guess their hero really was Zero.
(I hate that damn song!)

new game's picture

vw is another piece of shit at 150m...

 

Jason T's picture

i'm probably giong to be needing a car within the next 12 months ..camrey has 176k miles..

edifice's picture

Na man... Toyota and Honda run forever. I have a 2003 Civic with 240k on it. I'm looking to get 250k out of it, at least.

Simple J. Malarky's picture

2001 Civic just went over 300,000. I love that car!

Berspankme's picture

Put 360K on an accord. Great car, only regular maint

new game's picture

190m on my 05 4-runner and 50m on 12 camry. both problem free...

amazing(lee) the 12 gets 30plus mpg out of 4 banger. drove 3300 mile road trip and averaged 33.6mpg. now that is some real trifty driving...

Countrybunkererd's picture

I have a picture of an odo in a 2000 camry with 650K on it... the salesman and i got into a discussion about high mile toyotas and bing!  My dad now drives our former camry and it has 260K on it.  I look for many years of driving on ours and hope they both hit 500K+ 

I can't do the eco driving, my wife doesn't allow me to drive her car without her in it because of it. 

QQQBall's picture

176k miles? Dude, I got 356k on my old cressida and 333k on a honda accord. Change the timing belt at 100k and oil every 3k to 5k... 176k is nuttin for a camry, even an older model.

saveUSsavers's picture

200K on my '90 Volvo 240, 290K on the '89/ best car ever made

Hal n back's picture

my 89 volvo--loved it--a few years ago rats got under the hood and chewed up the wiring.

they literally do not make them like that any more.

last time i sold a car was when the  clunkers deal was made. I traded in an explorer that the motor mounts had rusted out and not nearby dealer or mechanic wanted to try fixing it--too much of a hassell on that but I used it to trade in on a new lexus rx hybrid. That has 80k miles now and runs like new.

 

wash it, wax it maintain it-and surprise, it runs like new.

I am thinking that at age 70 now  my next car will be driverless so as a senior I can go out at night.

 

driverless cars should put a hit on DUI's.

 

remember the head of Ford said he thinks its driverless cars wil hit the road in 2020. He then said it means fewer cars wil be sold. Inagine sending junior to school or soccer practive  in a driverless car and then the car comes back home so you can do your chores. Or the spouse workiing in the city cna have the car drive to teh train startion and then come home to drive junior to school and back. and then pick up JR after school, and then pick up the city worker at train station.

 

the 3 and 4 car garages are now going to decline.

 

if the day ever returns where discounted cash flows are used for determining values of companies and using real discount rates, auto mfg stocks are doomed and so are most others.

 

 

 

 

Countrybunkererd's picture

When the driverless cars hit the streets, that will be the LAST year i buy a car if it is the only option.  I might even have to buy new just to be sure.

zagzigga's picture

Wow, you guys have some serious mileage on your cars! My 2001 Altima has "only" 124k miles on it. 

Ace Ventura's picture

Change the oil regularly and keep the fluids maintained along with the brakes....and it should easily get you to 225k+. My 2000 Celica has 135K and runs like a champ, as does my 2004 4Runner with 180K.

I use synthetic oil so I only change it every 10k, but that's just personal preference.

innertrader's picture

AGREE!!!  I've driven my last two "well maintained" Toyota over 275k each!  YES, I maintained them and I have 186 on my current 2000 4-Runner Limited which is also going to be driven 275k.

new game's picture

10k on syn-exactly. filt at 5k intervals...

YourAverageJoe's picture

Bought a new one for my wife last week. $19,101 for the LE model.

Nice car, but too many gadgets and gizmos that can go wrong.Shop around for your extended warranty unless the finance guy gives it to you free.

Seasmoke's picture

The band on the Titanic is very good.