The big news in November seems to be that there wasn't much news. Sales came in right in line with expectations at a pace of 12.2 million units (SAAR).
Looking a bit deeper, though, there are a few storylines worth mentioning:
The first is that automaker press releases are full of comps with last year. These look good but are really meaningless. Remember, last year we were still shaking off the effects of the Cash 4 Clunkers hangover.
The second is that the algorithm used to calculate SAAR bakes in a reduction in sales from October to November. In other words, the SAARs for October and November could both be 12.2M units, but sales in November would actually have dropped by around 10%. Everyone quotes SAAR, but I still wonder how reliable it is as an indicator of economic direction.
Still, in most respects, November does seem like a repeat of October. Incentives levels were about the same, which is to say still down compared with past levels. Full size trucks and SUVs are still doing well.
The one big difference is November’s Thanksgiving Weekend--which is usually a good sales period. It seems to have played out as expected. Taking into account the consumer preference for buying during sales events, one could position November as a step back from October. (The SAAR should have beaten October's.) Makes December an interesting month…
There are a few data points not being reported that I thought I would share. I noticed that traffic to Edmunds was up in November, compared with October. If it followed unit sales, it should have dropped. What is interesting is what these shoppers looked at. Here’s a sample:
Shopping Patterns, November vs. October
- Advice/Buying Guides +22%
- Incentives +7%
- Consideration -6%
- Purchase Intent -14%
The distinction here is between early shopping activities, which are up, and late shopping activities, which are down. Seems like people are testing the waters, but still holding back. One hypothesis: Incentives are down. Consumers are looking for deals and not finding them—at least at the level they expect. So they hold off.
How this plays out in December—with its historical emphasis on year-end deals—will be interesting.