New-vehicle sales for November are expected to maintain a steady seasonally adjusted annual rate (SAAR) of 16.0 million, an increase from last November’s SAAR of 15.5 million consistent with the sales pace observed in October, according to the Cox Automotive forecast released Nov. 26.
The sales volume is expected to reach 1.32 million, down 1.3 percent from October but a 6.6 percent increase from one year ago, reflecting the differences in the number of selling days compared to last month and a year ago. There are 26 selling days in November, one less than last month but one more than last year.
Charlie Chesbrough, senior economist at Cox Automotive, offered with the 2024 elections decided, “we may see” vehicle sales finish the year in a strong position.
Improved Inventory Levels, Higher Incentives
“With less uncertainty in the market, consumer confidence is moving higher, which will likely increase consumer willingness to buy a new vehicle,” said Chesbrough in a press statement with the report. “Additionally, vehicle affordability is improving, thanks to higher incentives and falling auto loan rates, which increase consumers’ ability to buy.”
New-vehicle inventory volume topped 3.0 million units at the start of November for the first time since the pandemic, which is higher by more than 677,000 units compared to one year ago. Days’ supply climbed to 85 at the start of November, up two days from the revised start of October count and 10 days higher than a year earlier.
Additionally, higher inventory levels are seen as pushing new-vehicle sales incentives, rising to 7.7 percent of the average transaction price in October. This is the fifth consecutive month of higher incentives and the highest level since April 2021.
Sector Breakdown
By segment, all sectors reported year-over-year growth but down from the month before. As for volume, compact SUV/crossover is expected to finish with 230,000 for November (up 10.8 percent from last year/down 0.4 percent from November), followed by mid-size at 195,000 (1.6 percent/-2.1 percent), full-size pickup truck 185,000 (7.4 percent/-2.5 percent), compact at 95,000 (15.5 percent/-2.1 percent) and 75,000 mid-size car (10.8 percent/-3.2 percent).
There are expected to be 540,000 other segments, which is 8.5 percent higher than November 2023 but down 0.7 percent from a month earlier.
EV Sales Expected to Surge
The election has sparked much speculation about the potential effects of a new administration on the auto market, particularly concerning electric vehicles (EV) and emissions standards.
Chesbrough noted there may an increase in EV and plug-in hybrid (PHEV) sales over the next few months as buyers move to take advantage of discounts that may disappear in 2025.
“There is concern that federal tax credits for EVs and PHEVs may be reduced or eliminated when the new administration takes office,” he said. “As a result, EV sales may experience some tailwinds, leading to robust activity through the end of the year.”
