US light-vehicle sales rise 1.2% y/y in January, full-year forecast at 16.9-mil. units
US light-vehicle sales improved by 1.2% year on year (y/y) in January, with the seasonally adjusted annual rate estimated at 17.1 million units, down from 17.8 million units in December 2017. Full-year 2018 sales are forecast to slip, compared with 2017, yet remain robust and reflect healthy demand.
Light-vehicle sales in the United States have started the year with a 1.2% year-on-year (y/y) gain in January. The SAAR in January is estimated at 17.0 million units, lower than the SAAR in the final months of 2017. US light-vehicle demand remains robust, although the full year 2018 sales are still expected to return a decline.
General Motors (GM) continues to focus on growing retail sales and market share, reducing daily rental deliveries and maintaining operating discipline. In January 2017, fleet sales gained in the more profitable commercial and government sectors, with the less favourable daily rental fleet sales down y/y. GM reported a 1.3% y/y gain in January. At the close of December 2017, GM's inventory was at 63 days' supply, compared with 83 days at the close of November, and met the company's goal of getting the inventory below 70 days' supply by the end of 2017. In January 2018, however, the inventory increased to 94 days' supply. Buick reported a 4.0% sales gain in January, including more than doubling sales of the LaCrosse sedan. As the all-new Regal is just arriving in dealers, building inventory will take some time and Regal sales declined dramatically in January. The Enclave is also still building up inventory but, along with the Regal TourX, is likely to improve Buick's performance in 2018. Cadillac sales declined 3.9% in January, though the Escalade did manage to outsell its all-new competitor, the Lincoln Navigator, and Cadillac claims continued increases in average transaction price (ATP) and retail sales. Chevrolet saw sales improve by 5.0% in January, with the gains largely on the truck side, as sales of the Colorado and the Silverado gained over January 2017, and the new Equinox saw sales improve by 50%. A new-generation Silverado is to receive its market launch in 2018, but will face stiff competition from an all-new Ram. GMC sales slipped in January, dropping 11.4% y/y. Only the Terrain and the Canyon saw sales gains, while the refreshed Acadia saw sales drop 16.4%.
Ford Motor Company has kicked off 2018 with a decline of 6.6% y/y in January. The Ford brand saw sales fall 5.6% and Lincoln sales dropped 27.0% in January. Ford Motor Company's total car sales declined 23.3% y/y in January, utility vehicle sales dropped 5.9%, and truck sales grew 2.2%. Ford brand car sales fell 22.0% during the month, with only the Police Interceptor, Fiesta, and GT sports car registering gains. While Ford has a refreshed Edge to launch later in 2018, the brand's sport utility vehicle (SUV) sales declined 4.4% y/y, including a 6.3% drop for the Edge. Ford Trucks sales remain strong, though with a narrow 1.6% y/y gain. Lincoln saw a third consecutive monthly decline in January, with MKZ sales down by nearly half and the Continental not maintaining its initial strength. The MKC and MKC may be assisted by a facelift midway through 2018, with the MKX also getting a name change. However, the sales of both were down substantially in January. The all-new Navigator performed well, though.
Fiat Chrysler Automobiles (FCA) continues its sales slide with a 17th consecutive month of declines. In January, sales slipped 12.7% y/y, excluding Maserati. Aside from Alfa Romeo gaining sales from the new Giulia and Stelvio, only Jeep sales showed a positive momentum, rising 2% y/y as the Compass outperformed the results of the Compass and Patriot combined in January 2016. Dodge sales declined 31% y/y in January, still impacted somewhat by the Dart. The Journey saw a sharp sales decline, likely one of the vehicles for which FCA is reducing fleet volume. Chrysler sales declined 21% in January, though the Pacifica's sales jumped 20%. A further sign that FCA is unable to move Dodge Caravan buyers to the Pacifica is that the Caravan outsold the Pacifica by more than 2,000 units in January. The Fiat brand's sales were down a dramatic 43% to 1,229 units for the month. As Ram prepares to launch an all-new truck in the first quarter, its sales dropped 13% y/y in January. According to FCA, the company continued its planned reduction of sales to rental fleets overall, and reported a decline of 50% in fleet sales in January alone. FCA also notes that, while numbers were down, retail sales improved by 2%.
Toyota saw US sales decline in 2017, but ended with a strong improvement in December. In January 2018, the company came out with a strong 16.8% y/y gain – outselling Ford during the month in the process. Toyota's total car sales gained 5.0% in January, with the Toyota brand seeing a 5.7% y/y improvement on the Camry and Avalon and the Lexus brand seeing a decrease of 2.3% y/y. On the truck side, the automaker's sales picked up 25.4% y/y, with the Toyota brand's sales up 20% (a 26.7% improvement for utilities and 22.2% growth for pick-up trucks) and the Lexus brand's utility sales increasing 14% y/y. The RAV4 was Toyota's best-selling model in 2017 and in January 2018. At Lexus, all existing car lines saw sales declines in January, except the additive LC coupe, with all Lexus utilities but the LX seeing an improved performance.
American Honda saw sales slip 1.7% y/y in January, putting the brand behind FCA at the year's start. Honda division's sales declined 1.6%, while Acura's sales declined 3.2%. For the first time, Honda's trucks outsold its car lines, with 50,410 units of Honda branded trucks and utilities sold versus 45,224 units of Honda branded cars. The CR-V outsold the Civic in January – by a margin of 577 units. The Accord is now the third-best-selling Honda; changing over to an all-new model, Accord sales have not gained traction and were down 9.5% y/y in January. These three models accounted for nearly 69% of Honda's US sales in January, compared with 72.5% in 2017. Acura's sales declined 2% in January, with all model lines but the low-volume NSX and RLX declining. The MDX and RDX continue to account for most Acura sales; an all-new RDX arrives in the second half of 2018. Acura will be looking for a sales injection.
Nissan reported sales gains of 10.0% y/y to 123,538 units in January. Including both Infiniti and Nissan, the group saw car sales grow 3.7% y/y, while truck/utility vehicle sales gained 15.3%. The Nissan brand continues to see its best performance from the Rogue. The Rogue saw sales grow in January to 36,184 units, outselling the Honda CR-V and Toyota RAV-4. The Nissan division as a whole saw sales improve 12.1% y/y in January; car sales picked up 5.6% and truck sales gained 17.8% for the brand. Infiniti, however, saw sales decline by 8.0% y/y in January, with the brand's car sales dropping 15.9% and its utilities sales falling 3.1%. An improvement is possible later in the year with all-new QX50 and facelifted QX80.
Subaru delivered a 74th consecutive month of y/y sales growth in the US, up 1.1% over January 2017. The Impreza showed a gain of 4.8%, with the Crosstrek (up 45%) also doing well. Sales of the Legacy and Forester slipped in January, however. The all-new Ascent three-row mid-size SUV due in mid-2018 is expected to boost the brand's US performance.
Volkswagen (VW) Group is seeing US sales improve as it moves away from comparison to the start of the diesel crisis. VW Group saw sales for January increase by 5.2% y/y. However, on a model level, each of its cars showed steep sales declines, offset by the new Atlas and Tiguan. Audi reported its 85th straight month of US sales growth, up 9.9% y/y in January. Porsche returned a sales increase of 4.7% y/y to start 2018.
The combined US sales of Hyundai, Genesis, and Kia dropped 6.4% y/y in January. The declines were at Hyundai (down 11.3%) and Genesis (down 11.3%), while Kia's sales were flat for the month.
Outlook and implications
The sales SAAR in January 2018 is estimated at nearly 17.2 million units, but is a positive start to 2018 and a decent result following the strong demand in fourth quarter 2017 and December's 17.8-million-unit SAAR. We estimate a full-year sales volume of 16.9 million units in 2018. This outcome is down from the 2017 total, but is still a healthy industry demand level, supported by positive economic conditions and, specific to the auto industry, still welcoming credit conditions and high incentive levels. Headwinds from an inflow of used vehicles and continued expectations of a slowdown in passenger car sales result in expectations that overall light-vehicle demand will decline for a second consecutive year in 2018, but remain at elevated levels.
There were 25 selling days in January 2018, one more than in the same month last year. On a unit volume level, approximately 1.15 million light vehicles were sold in January 2018, reflecting a 1.2% y/y gain.
Manufacturers' results were mixed, a situation which could continue throughout the year as automakers pull various levers to capture as much market share as reasonable in a contractionary year. Toyota reported the strongest gain in January 2018, with sales up 16.8%, also pulling ahead of Ford for the month to grab the number-two position in the market. Nissan reported a 10% y/y gain and took fifth position away from Honda, which saw sales decline 1.7% y/y. VW, still in 10th position, saw sales gain 6.7% y/y. GM sales picked up 1.3%, and the company retained its position as the top-selling US automaker. Subaru saw the smallest y/y sales gain, up 1.1%. FCA continues to see sales slide, down 12.7% for the month. Ford sales slipped 6.6% y/y in January as both its cars and utility vehicles struggled, while Honda sales dropped 1.7% y/y with a weak performance from Accord and Acura.
IHS Markit will update this report in the coming days with inventory and car/truck split data; these were not available at the time of writing.
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