US auto sales remained red hot in November, with the seasonally-adjusted annualized rate (SAAR) coming in at 18.13 million units, matching October's result. For the first time ever, sales have breached the 18 million unit mark in three consecutive months.
Of the top-selling brands, Hyundai stood out with a 12% y/y increase in sales, while FCA, GM, Kia, Nissan and Toyota all recorded more modest gains in the 1-4% y/y range. In contrast, sales of Ford (-1% y/y) and Honda (-5% y/y) vehicles fell during the month. After holding steady in October, Volkswagen sales plunged by a whopping 25% y/y in November. While the emissions scandal likely played a role, reports suggest that lack of inventory may have been holding sales back as well.
Auto sales certainly didn't disappoint in November, with demand remaining quite strong. Anecdotal evidence suggests that BlackFriday sales and incentives likely played a larger-than-normal role in boosting deals during the month. The auto market has been a bright spot in the U.S. economy for most of this year, with sales running higher than many had initially projected. The strength in sales highlights a healthy domestic economy, as well as the impact of low interest rates and favorable loan terms.
The Federal Reserve is expected to begin hiking interest rates at its next meeting in December, which could take some of the steam out of the auto market next year. This suggests that the current sales pace of over 18 million may not be sustainable. That said, rate increases are likely to be slow and gradual, and continue to support an elevated level of sales.
