Car sales in December closed exceptionally strong because there was likely a pull forward effect, especially given a number of attractive incentives offered across the industry.
January may be suffering a bit of a hangover after the impressive deals seen at the end of last year, according to, Alec Gutierrez, senior analyst for Kelley Blue Book, and Michelle Krebs, senior analyst for Autotrader
The senior analysts hosted February’s automotive sales day conference call on Wednesday.
It looks as if new-car shoppers are “taking a bit of a breather,” said Krebs.
“Dealers are telling us showroom traffic for new cars is down a bit, and they’re telling us used-car traffic remains pretty firm,” she said.
Gutierrez explained that the year ended with a lot of incentives and that January is generally heavy for incentives as well.
“Industry incentive spend in December was close to $4,000 per unit so there are likely a lot of consumers who jumped ahead to take advantage of year-end closeout sales,” said Gutierrez.
He said the environment across the board is still relatively strong and conducive towards a continued strength.
“The unemployment rate remains very low at below 5 percent and consumer confidence remains relatively steady,” Gutierrez added.
He said he expects January to closeout at a new-car annual selling pace of about 17.4 million units overall.
“For the year, right now we’re bench marking sales likely in the low 17 million, 17.2, 17.3 (range) — somewhere around there,” said Gutierrez.
“I think consumers will still not have an issue getting affordable financing on a new- or used-car purchase or lease for that matter — which remains at 30 percent penetration.”