US light-vehicle sales up 7.5% in 2013, SAAR slips to 15.4 mil.

Detroit automakers

While able to claim a 7.3% gain in full-year 2013 sales with 2.8 million units sold, General Motors' (GM) full-year demand was even with the market's overall gain of 7.6%. However, the company did see a 6.3% y/y decline in December 2013, largely blamed on bad weather at both the start and end of the month. While Cadillac was essentially flat y/y, all other divisions saw declines in December sales. After several months of y/y gains, Buick demand fell 6.6%. Though the new Encore brought 2,761 buyers to Buick in December, demand for the Enclave was down 20.4%, the LaCrosse was down 23.3%, and the Verano was down 39.2%, while the Regal gained 14.5%. Taking a look at the full year, the brand was up 13.9%. Despite seeing demand soften in both November and December, the Enclave remains the brand's strongest seller, with full-year Enclave demand up 6.8% to 60,534 units. The story is similar for the LaCrosse, Buick's second-highest volume product. YTD demand is down, but it has still outsold most other Buicks. The Regal has struggled all year and is down 24.1% YTD to 18,685 units. However, Cadillac's full-year car sales were up 49% on a full year of XTS and ATS sales – although the CTS was down compared to 2012 due to 2013–14 model-year changeovers. Chevrolet's small Spark and Sonic saw the biggest declines in December at 26% and 23% respectively, although both are up in YTD terms. When the brand's SUVs are also factored in, the division saw demand grow 21.9% for the year. Chevrolet sales were down 8.1% in December, a stark contrast to a 12% gain in November. For the year, the brand's sales grew 5.2%. The strongest seller in December and YTD was the Silverado, up 10.3% y/y and 14.8% YTD. The Cruze continues to see stronger demand than the number-three Equinox, but both saw demand contract in December. The C-segment sedan gained 4% YTD and the SUV 9%. The Malibu and Impala both saw increased demand in December, but are both down YTD with model changeovers. The Corvette has taken off well, enabling Chevy to boast its best sales month since 2007 at 3,005 units – despite lowered production as the C6 gave way to the C7, the model line saw demand jump 22.4% YTD. However, Camaro sales are down 14.1% y/y and 4.5% YTD; the Volt also saw a decline of 1.6% in 2013. GMC saw a smaller drop in December, down 1.8%, and a YTD gain of 8.9%. The division's YTD return is higher than the market increase of 7.6%. Within the range, the Acadia saw a 53% gain in December and 14.7% YTD, while the smaller Terrain saw a 30.5% drop y/y. The Sierra dropped 4.6% in the last month of the year, but still saw demand grow 17.3% for the year. Despite being at the end of its lifecycle, demand for the larger Yukon XL grew 7.8% in December, while the smaller Yukon dropped 8.8%; for the year, the XL was up 33.4%, while the Yukon saw relatively steady annual demand, picking up only 1.8%.

At 218,058 units for the month, Ford Motor Company's December sales were up a modest 1.8%; however, the company's 10.8% YTD demand gain is outpacing the market. Total annual sales for the company reached 2.4 million units. The Ford brand was up 1.6% in December and 11.3% for the year; Lincoln gained 8.1% in December, but was flat (-0.6%) for the full year. The F-Series retained its position at the top of the industry, delivering an 18.3 YTD gain; by contrast, GM's full-size pick-up sales (Chevrolet and GMC) were up 15.5%. The Escape (295,993 units YTD) and Fusion (295,280 units YTD) are the brand's second-strongest product lines, though with the increased capacity at Flat Rock, Ford was able to meet a YTD 22.4% demand gain for the Fusion (which set a record as well) versus 13.4% for the Escape. While the C-MAX shows a huge YTD increase due to partial availability in 2012, the hybrid's sales fell 52.9% in December. The Fiesta and Focus both struggled in December as well. The Fiesta still returned a 25.2% gain for the full year, while the older Focus saw a decline of 4.6%. Speaking of ageing models, the Edge and Expedition saw essentially flat demand in 2013. Over at Lincoln dealers, the MKZ's 73.2% y/y gain helped offset losses from the other product lines in December, enabling car sales to reflect a 28.5% demand increase, while utilities declined 6.1%. On a YTD basis, the brand's strongest seller is the MKZ (up 15.4% YTD), followed by the MKX (down 4.8%).

Chrysler demand grew ahead of the market in December at 5.6%, which did not change YTD overall gains, holding at 8.9%. As this accounted for 69.3% of sales, the company was more reliant on trucks in 2013 than cars. The Fiat brand remained relatively flat for the month and year (up 1% in December and down 1% YTD). Though the 500L continues to cannibalise 500 sales instead of delivering gains, the fact that the small car picked up 52% compared to November 2012 might indicate it is gaining some traction. Chrysler had a troubled month, down 21% in December, while demand for the Town & Country was up 5%, but the 200 and 300 were each down more than 30%; YTD, the brand is down 2% in an up year. The Cherokee is performing well, and Jeep picked up 34% in December. Cherokee deliveries reached 15,038 units in December, continuing to outpace the Patriot and Compass combined. For the year, Jeep is up a more modest 3%. This result demonstrates how dramatically the brand was hurt by the lack of a mid-size SUV for most of 2013, as every other model line saw double-digit growth across 2013. Dodge sales fell 8.9% in December, though is up 14% YTD. The only Dodge model to see a y/y jump was the Durango (3%), though for the year all but the Caravan can claim demand increases. Ram gained 17% y/y, with the pick-up accounting for 92.7% of Ram sales – the Caravan-based Cargo Van and Fiat Ducato-based ProMaster Van contributed about 2,600 units. YTD demand for the Ram pick-up gained 21%, the largest gain in the full-size pick-up market.

Japanese automakers

Toyota Motor Sales dropped 1.7% in December, compared to a market increase of 1%. The Toyota brand was flat y/y, while Lexus demand increased by 18.1%. Camry's full-year sales were up only 0.9% and down 4.6% in December, but that was enough for the sedan to retain the title of top-selling US car. Toyota sold 408,484 Camrys in 2013; Honda came in second with 366,678 units sold. Notable changes across Toyota's range include continuing declines for the Yaris (down 69.9% y/y and 30.2% YTD) and the Avalon's 140.2% full-year gain. Despite launching an all-new Corolla in October, the nameplate's December sales were down 8.6%. The Honda Civic took the title in the C-segment car market, but Corolla did step ahead of the Focus. The Prius line-up dropped 21.6% y/y and 1% YTD. Toyota's full-year car sales grew 3.7%, but its SUVs increased 11.8%. Toyota SUVs saw increased demand, except for declines for the FJ Cruiser and Venza (down 51.4% y/y, 16.8% YTD), led by the RAV4 (46.1% y/y; 27.0% YTD). Toyota's Tundra gained 7.2% in December, while the Tacoma fell 9.0%. The Scion dropped 21.7%, with the year down 7.1% to 68,321 units. Only the FR-S saw a full-year gain, though the model has seen two months' running of steeply declining demand. Lexus gained y/y in December, up 13.6%. For the full year, Toyota's luxury contender is up 12.2%. December saw gains in CT, IS, and ES car lines, as well as from the full SUV range. Lexus car demand increased 15.4% for the year, with SUVs increasing 8.3%.

Demand for Nissan and Infiniti picked up 10.5% in December to 109,758 for the month. For 2013 in full, the two brands sold 1.248 million units, a gain of 9.4%. At the Nissan Division, the y/y gain was 11.4%, with gains for the new Rogue and Sentra. LEAF demand grew 69.8% in December and 130.8% for the full year to 22,610 units. Altima (24,816) gained 3.5%, holding the number-three spot in mid-size sedans and serving as Nissan's best-selling US product. YTD, the Infiniti is up 4.8% for the month, but down 2.9% for the year.

American Honda sales roughly mirrored the market – the company's total gained 1.9% in December and 7.2% for the full year. Honda increased 2.4% and Acura slipped 1.8%. Honda held the number-two car sales slot with the Accord, which saw demand up 9.8% in December and 10.5% for the year. The Insight, CR-Z, and Civic Hybrid saw gains, but these combined only accounted for 1.3% of Honda Division sales. Even as the Fit is closing out the current generation lifecycle, it gained 25.5% in December and 8.4% for the year. The CR-V picked up 11.8%, and outsold the Ford Escape for the month and year. For Acura, the only December gain came from the MDX, up 29% y/y and 4.3% YTD. The RDX was up 8.9% in December, more telling than its 51.6% YTD gain as 2012 was a transitional year. Acura has done well with the RLX, selling 5,053 units in 2013. The MDX is Acura's best-selling product at 53,040 units for the year, followed by the RDX's 44,750.

December demand saw a 15.7% decline for Mazda. The brand is up only 2.5% for the full year, down from the market's 7.6%. The only Mazda two model seeing gains versus full-year 2012 were the Mazda6 (up 29.3% to 43,638 units) and the CX-5 with an 83.6% increase that also reflects availability in 2012. Falling sales in the Mazda3 are partly due to a model changeover as the 2014 model year arrived late. The Mazda2 saw the second-largest drop, with only 11,757 sold in 2013.

Subaru saw the best December "ever" and a sales record for 2013. Given the year's performance, this is not a significant surprise. Forester's sales for 2013 were up 61.9%, making that the best-selling Subaru model line. The Outback fell to second place, flat at 118,049 units (up 0.4%) sold in 2013. The XV Crosstrek sold 53,741 units in 2013 – nearly as many as the Impreza itself, which was down 13.7% as the company prepares for a new generation. It does appear that the XV Crosstrek may also be cannibalising sales from the Impreza. Though Subaru's gain in December of 9.6% was dramatically lower than the demand increase of 29.8% in November, the market was only up 1% in December and the company is up 26.2% for the year.

Other automakers

Volkswagen Group (VW) continues to struggle towards a US sales goal of 800,000 units by 2018. For 2013, the company achieved sales of 611,512 units, basically flat from 2012 in a market that grew nearly 8%. However, Audi saw a fourth record year in a row, with more than 158,000 units sold. Porsche bucked both monthly and yearly increases, with a 10% jump in December and a 21% gain for the year. Combined sales for Hyundai and affiliate Kia, which operate separately, totaled 1.25 million units in 2013, basically flat compared to 2012. The two have struggled to gain share or sales in 2013, largely due to a lack of capacity. Deliveries for the Hyundai dropped 2% for the month to 96,636 units, though the brand is up 6% for the year; the brand's best-selling model for the year was easily the Elantra at more than 247,000 units. Kia lost 14% in December and that brand is down 7.5% overall in 2013. In Kia's co-ranger, the brand sold 155,893 Optimas in 2013.

Outlook and implications

Sales for 2013 finished out at about 15.6 million units, encouraging expectations for a 16-million-unit year for 2014. While sales in December increased less than 1%, this was roughly in line with IHS Automotive expectations for stable sales in the final month of 2013. Bad weather in large segments of the United States impacted December sales, as well as a stronger-than-expected November. Throughout 2014, OEMs will need to manage expectations against a more modest growth year and comparisons with a high 2013.

However, favourable credit expectations, an increase in leasing, and growing consumer confidence conspire for a solid year, and we forecast US sales to increase to 16.7 million units by 2016, though not breaking 17 million units over the course of the next five to 10 years. While sales of late have been reflecting pent-up demand and a strengthening economy, the US is a relatively mature market.

There were 25 selling days in December, one less than a year ago, and the comparisons to follow do not adjust for this difference in selling days. On a unit volume level, approximately 1.36 million light vehicles were sold, a slight 0.3% improvement from year-ago levels. For full-year 2013, demand was up 7.6% compared to 2012.

To close out 2013, year-on-year (y/y) manufacturer market share performance results for the month were mixed, but reflective of overall yearly trends. Market share growth was led by Fiat-Chrysler, up 5.7%, and Ford, which realised a 1.7% y/y improvement; both of these automakers were among the select few manufacturers to improve market share on a full-year basis. Nissan and Subaru were the only other automakers with positive 2013 market share gains. Meanwhile, GM sales were down 6.3% for the month, while Toyota (down 1.7%), Hyundai-Kia (down 2.0%), and the VW Group (down 12.1%) also realised softer sales than December 2012 levels.

Sector sales in December also reflected full-year 2013 trends, with light truck sales outpacing passenger-car demand. For the month, light truck sales were up 3.1% and accounted for 54.6% of total sales volume – the best truck share since December 2011. Moderating fuel prices and continued momentum within the full-size pick-up and crossover utility segments assisted in boosting light truck demand during the year, and sector sales were up 10.5% in 2013. For the year, light truck sales accounted for 51.2% of total sales, with passenger cars coming in at 48.8% of the mix. We expect the momentum in truck sales to continue in 2014.

While days supply at the end of November left OEMs healthy and primed for a year-end sales surge that did not quite happen, the industry overall has a lower days supply at the close of 2013. Days supply levels remained relatively healthy, and we expect inventory levels to help motivate sales in the first quarter of 2014. Days supply industry-wide at the close of November was 76; the year finished with a level of 63 days. At Ford, month-end inventory of 615,084 left the company with 73 days supply versus 93 in November and up from a year ago. The automaker added additional plant downtime (in addition to already scheduled breaks) in December to help alleviate some of the inventory bloat. The month-end inventory at GM totaled 748,125, down about 30,000 units from November 2013; the top-selling OEM has an 81 days supply going into 2014. At month-end, Chrysler's inventory stood at 508,615 units, amounting to days supply of 79, compared to 91 days supply in November.