Last week I threw out a sales pacing for January that was markedly lower than the pacing seen in December. I also posted two reasons. One was benign — that early January sales "slipped" into the 2011 year-end totals (and obviously couldn't be counted twice as January sales). In other words, the drop was just a statistical anomaly.
The other explanation was that it was the high rate of sales the industry enjoyed in November and December that were the anomaly; a limited boost from buyers returning to market after the difficult conditions we saw over the summer.
These scenarios are not mutually exclusive. In looking at a richer set of sales data for January, it seems likely that both were true.
The good news is that the pacing for January is up from the 11.7m pace I reported last week. The bad news is that it is still a big drop from the pace in December. (And even bigger when you consider that the SAAR formula already assumes a 20% drop from December to January.)
Sales are now running at a pace of 640,000 retail sales. This translates to a SAAR of 9.8m. (Compare this with retail sales of 1,009k and a SAAR of 10.9m SAAR in December. If we assume a fleet mix of around 19.5% — slightly higher than December — then total sales for January will end up around 795k, and a SAAR of 12.1m. (Compare this with 1,244k sales and a SAAR of 13.5m last month).
Looking at retail share, compared to the same period last month, BMW and Mercedes-Benz are down significantly (both, especially BMW, were strong at the beginning of December. Hyundai and Kia, Nissan, and Honda are up. All three were relatively weak in the same period last month). Below are the details:
There is room for further strengthening by the end of the month, but overall it seems clear that January sales will be a significant step back from December.