The sales figures coming in this week show that weekly sales forecasting can be a hazardous thing.
Last week I reported that sales were surprisingly high—for a Januar—with an overal SAAR of 12.8m. This week, the data coming in still shows January coming in above December’s pace, but the lift will be more modest.
The retail pace has slowed slightly to around 702,000 units, or a retail SAAR of a bit fewer than 10.6m. Assuming 17% fleet, we get to overall sales of 846,000 sales, or an overall SAAR of 12.72m.
In terms of winners and losers, BMW is off around 18% from their unusually strong December pace. Honda is off around 7% and Hyundai and KIA are up (again!) around 14%
A couple thoughts: As I noticed last week, these numbers are unusual. Typically, January starts strong as the market recovers from the December sales events. This year, it looks like the pace is slowing as the month progresses. (I would expect the opposite.) This raises a big question mark about how the month will end. Will the pace continue to slow, or we will see the pace turn around?
The one very big question mark is fleet. Fleet is a lousy measure of consumer confidence (obviously), but it can contribute to automaker profitability, so is important to monitor.
Last January, fleet made up fully 25% of overall sales. This year, we are assuming only 17%. (In line with recent months.) Last January saw unusual levels for restocking and possibly local governments ordering new fleet vehicles with stimulus dollars. So I don’t think 25% is something we will repeat anytime soon.
But 17% seems low, as fleet sales are typically front loaded with a new year.
We will get fleet sales guidance form the OEs next week, and will have better visibility on the likely percentage then. Right now, I would bet there is room here for additional upside.
So, January is still looking better than December. But remember, there are still plenty of selling days between now and the end of the month.