A December to remember for auto sales – or not?

The U.S. auto industry is poised to conduct bold — if involuntary — experiments this month in marketing and inventory management: how to execute the traditional year-end sell-off that consumers have been conditioned to expect when you have very little on hand to sell.

December is typically one of the best months for vehicle sales thanks primarily to two segments: luxury and commercial fleet. But after November yielded another month of deliveries suppressed by dealer inventory shortages, consumers will have trouble finding something on which to place a big red bow, said Tyson Jominy, vice president of data and analytics at J.D. Power.

“If Black Friday weekend is any sort of leading indicator to what we should expect in December, it was pretty soft. So without things to sell and without a whole lot of marketing support already, I don’t expect this to be a December to remember for anyone,” he said.

Among the seven automakers that reported their November sales this week, Ford Motor Co. was the only one to post a year-over-year gain — up 5.8 percent for its first such gain since May — while the remaining automakers saw their volumes fall in a range from Mazda North America’s 5.3 percent to Subaru of America’s 35 percent. Collectively, the seven automakers saw their sales decline more than 14 percent from a year earlier. Other automakers didn’t report November sales but will report their fourth-quarter results right after the new year begins. November’s seasonally adjusted, annualized rate of sales stayed flat from October at 13.1 million, but it still remained well off April’s 18.5 million and below the 16.1 million rate in November 2020.

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Dealer inventory levels stayed around 1 million vehicles for the third consecutive month, Cox Automotive estimated, as shortages of microchips continued to hamper production and dealers reported quick turn rates on the vehicles they can get delivered to their lots.

“The market is very uneven right now, with some brands, and products, facing greater shortage than others, notably Toyota and Subaru, who reported significant sales drops last month due to tight inventory. Meanwhile, Ford inventory has improved since summer,” said Charlie Chesbrough, senior economist at Cox Automotive. “The inventory crisis is going to be with us well into 2022, and we can expect further market share shifts as product availability ebbs and flows.”

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