We will be issuing our official forecast for December soon, but here is a preview...
Last week, I reported on how the month started strong with a pace that looked to exceed the SAAR for November. This was no small feat, as higher sales in December are assumed in the SAAR algorithm. To even equal November SAAR, the unit sales in December would have to jump by roughly 30%. Early December sales jumped that bar handily and there was even some talk at the office of hitting 14m SAAR in December, which would have required a 40% jump in unit sales over November.
So the news this week, while not awful, is still disappointing. Retail sales have dropped markedly and we now estimate that total sales will end up around 1230k. This translates to a SAAR of 13.4m. (Assuming a fleet rate of around 18%.)
13.4m is still good when looked at over the span of the year's sales. But when you consider that sales performance is boosted by a tailwind of the buyers who deferred buying when prices were high over the summer, it suggests we may have some sales speed bumps to deal with next year.