KPI – December 2024: State of Business – Automotive Industry

KPI – December 2024: The Brief

KPI – December 2024: State of Manufacturing

KPI – December 2024: Consumer Trends

KPI – December 2024: State of the Economy

KPI – December 2024: Recent Vehicle Recalls

GLOBAL LIGHT VEHICLE SALES

In November, the Global Light Vehicle (LV) selling rate held at 95 million units per year – a small improvement month-over-month, but the best result in 2024 thus far. Market volumes continued to grow, with year-over-year sales up 6% and year-to-date sales at 80 million units.

According to GlobalData, Chinese consumers capitalized on scrappage subsidies and a very competitive pricing environment. In the U.S., an extra selling day contributed to increased year-over-year sales. Data shows sales in Western Europe remained lackluster – “mirroring previous trends, as political and economic challenges persist, exacerbated by recent government turmoil in Germany and France.”

“The 2024 forecast is holding at 88 million units, an increase of 1.5% year-over-year,” says Jeff Schuster, vice president of automotive research at GlobalData. “Autos are poised for continued growth in 2025 as conditions improve in key markets. Light vehicles are projected to increase to 90.6 million units, an increase of 2.7% from 2024.”

Market Lines is now excluding exports from the China sales total. The adjustment has been backdated to 2018.

U.S. NEW VEHICLE SALES

Total new-vehicle sales for November 2024, including retail and non-retail transactions, are projected to reach 1,361,200 – a 6.7% year-over-year increase on a selling-day-adjusted basis, according to a joint forecast from J.D. Power and GlobalData.

“November’s results highlight strong sales performance, driven by rising inventory levels for certain brands and deeper discounts from both manufacturers and retailers,” says Thomas King, president of the data and analytics division at J.D. Power. “(We) anticipate consumers will spend nearly $50 billion on new vehicles this month, representing a 13.7% increase from a year ago and setting a new record for the month of November.”

Takeaways, courtesy of JD Power:

• Retail buyers are on pace to spend $49.8 billion on new vehicles, up $6 billion year-over-year.
• Trucks/SUVs will account for 81.5% of new vehicle retail sales in November.
• The average new vehicle retail transaction price is expected to reach $45,471, down $150 year-over-year.
• Average incentive spending per unit is predicted to reach $3,291, up $978 year-over-year. Spending as a percentage of the average MSRP is expected to increase to 6.5%, up 1.8 percentage points year-over-year.
• Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is expected to register $2,276, down 21.2% year-over-year.
• Fleet sales are on pace to total 208,108 units in November, down 8.6% year-over-year. Fleet volume is expected to account for 15.3% of total light-vehicle sales, down 2.6 percentage points from a year ago.
• Average interest rates for new-vehicle loans are hovering 6.45%, down 71 basis points from a year ago.

“As the year draws to a close, the positive trends observed in November are expected to persist. Gradual improvements in more affordable vehicle availability are likely to sustain the momentum of new-vehicle sales, while transaction prices and profitability are projected to moderate slightly,” King says. “Despite challenges, such as stubbornly high interest rates and declining used-vehicle values, the overall health of the new-vehicle market remains strong.”

Although profit per unit is decreasing, higher sales volumes and enhanced leasing activity reflect resilient consumer demand, he continues.

“These trends position the industry for a solid finish to the year, while continuing to adapt to evolving market dynamics.”

U.S. USED MARKET

Wholesale used-vehicle prices (on a mix, mileage and seasonally adjusted basis) showed no change from November in the first 15 days of December. The mid-month Manheim Used Vehicle Value Index remained at 205.4, posting a gain of 0.7% from the full month of December 2023.

“We’ve continued to see tighter wholesale supply at Manheim over the last several weeks and it has further declined in early December as sales conversion remains elevated,” says Jeremy Robb, senior director of economic and insights at Cox Automotive. “December usually shows a small gain in non-seasonally adjusted prices for the full month of December, but we are running below that trend early in the month. However, this is our second report in a row with the Manheim Used Vehicle Value Index exhibiting higher values year-over-year, so it appears we’ve seen the bottom in wholesale prices for now.”

According to Manheim, all major market segments posted mixed results for seasonally adjusted prices year-over-year during the first half of December. Compact and midsize cars performed best with no real change.

On the contrary, pickups and SUVs dipped 0.3%, while the luxury category was down 1.7% over the period. EVs declined 7.6% year-over-year, while the non-EV segment fell by 0.2%.

Though they underperformed year-over-year, pickups performed best month-over-month at plus-1.2%. Compact cars increased 0.8%, while midsize and SUVs dropped 0.4% and the luxury segment declined the most at 0.7%.

EVs recorded a strong gain month-over-month, increasing by 3.5% in the first half of December, while non-EVs were lower by 0.2%. Non-adjusted EV values also were higher by 2.4%, though the seasonal adjustment strengthened the overall results.