Retail incentives, holiday sales and a last push to reach year-end objectives have boosted December to new vehicle sales month of the year. It will still fall short of last year’s record results however — and further slowdowns are ahead, according to Kelley Blue Book analyst Tim Fleming.
Year-over-year, new vehicle sales are expected to decrease two per cent to a total of 1.6 million units in December, 2016, resulting in a seasonally adjusted annual rate of 17.4 million.
Kelley Blue Book anticipates further slowdowns in 2017, with sales in the range of 16.8 to 17.3 million — a one to three per cent decrease from 2016.
“Substantial incentive hikes this year haven’t resulted in retail growth, while inventories continue to grow,” says Fleming. “An increasing supply of used cars, especially off-lease units, is already putting pressure on residual values, which could impact sustainability of today’s high levels of leasing.”
The biggest volume increase in December will likely be reported by General Motors, where Kelley Blue Book projects a one per cent increase in market share, fuelled by sales of the Chevrolet Malibu.
Hyundai-Kia could also capture market share in December, increasing sales by three per cent, a growth attributed to an expected increase in fleet sales.
Mid-size Suvs and crossovers are one of the fastest growing segments of the month, while mid-size cars are having another down month — the tenth in a row.
Overall market share for all cars will likely end the year at about 39 per cent, down from 42 per cent in 2015, and down 10 points since 2012.
Something to take into account when looking at the numbers is the fact that December 2016 has 27 sales days, compared to 28 in 2015
