New-car sales are expected to hit 14.7 million seasonally adjusted annual rate (SAAR) in November, slightly outpacing the 14.3 million unit pace achieved last month when Hurricane Sandy swept the East Coast, according to Kelley Blue Book.
Like this article? Sign up to receive our weekly news blasts here.Although sales remained somewhat suppressed in storm- devastated parts of the northeast immediately following the storm, it looks as though the worst may be over.
Sales were hard hit in New Jersey, where retail sales volume declined drastically in the days immediately following the storm. New Jersey typically accounts for 3 to 5 percent of all sales in the United States. In the week immediately following the storm, New Jersey saw its share of nationwide sales volume decline to 1 percent, its lowest share for the state this year.
While New Jersey was most heavily impacted by Sandy's aftermath, vehicle sales in New York similarly fell. In both states, auto sales have steadily returned to pre-storm levels of activity.
"Kelley Blue Book anticipates buyers that were forced to delay a purchase due to the onset of the storm will continue to return to market during the next several weeks," said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book. "Additional demand will come from residents that unfortunately had a vehicle destroyed. These consumers will likely help make the last weekend of November a strong one for the automakers with demand for replacement vehicles continuing into December."
Considering the thousands of consumers who will need to find a replacement vehicle in the near future,Kelley Blue Book expects sales to continue to trend upward during the last days of November, setting up the market for what could be a very strong December.
Sales gains to continue in December
While November's sales results appear on pace to achieve par for the course, December could be the strongest month in vehicle sales in 2012. Buyers who delayed purchases or that need to replace a storm- damaged vehicle will likely hit dealerships in droves, potentially driving sales beyond a 15 million unit annual pace.
"Although the industry can assume that a significant percentage of consumers seeking replacement vehicles will shop used, many automakers are offering residents of FEMA-designated storm-damaged areas additional cash incentives to entice consumers to shop for new cars," said Gutierrez. "Nissan, Mazda, Ford and Chrysler are among the manufacturers offering incentives such as $500 in additional bonus cash, employee pricing or special finance deals to those in the market for a replacement vehicle."
These special deals are in addition to the already generous incentives available in the marketplace today. Kelley Blue Book expects low finance rates, cheap lease offers and modest cash incentives to continue throughout 2012 and into 2013, so consumers looking for a great deal should have plenty of options. Those looking for a truck or SUV will continue to find the most generous cash incentives, while shoppers that find the remaining 2012 model-year vehicles in the marketplace also can expect to find significant savings.
