I am going to throw a number out there and then explain why we should not read too much into it. I will also explain why perhaps we should.
The number is 11.7m. This is the annual sales pacing, based on early January sales. (Assuming fleet sales are 19% of the total.) The reason we should not pay too much attention to this number is that it is common when the new year begins over a weekend, for sales that occur in the first few days of January to "slip" into December reporting. (This is done to help those year-end sales numbers.) It's hard to say how much of this happens, but it would explain why the last week of 2011 had such a high sales pace. And it would also explain why the early January sales results dropped so precipitously. (The SAAR formula assumes that January sales will drop 20% from December, so we are talking a major drop in sales.)
There is another view though. We have been pointing out for months that the year would finish strong as the manufacturers ramped up their year-end sales messages. There were a couple hundred thousand buyers, frustrated by high prices during the summer, waiting for just this signal. Add these buyers to the customers who were already planning on buying at year-end and you have a mini sales bubble.
This market view would suggest a significant sales slow-down starting in January.
So which is it? The timing of sales reporting, or a mini bubble bursting? We will know for sure next week...