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Transportation Carmakers sustain sales with big discounts and the occasional TV

Carmakers sustain sales with big discounts and the occasional TV

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“Fifty percent of the people were convinced the world was going to end no matter what happened” with the presidential election, said Sean Sellers, general manager of Charles Gabus Ford in Des Moines, Iowa. “It took some of those people out of the market” at the start of the month.

Automakers and dealers drew from a grab bag of holiday-season tricks to sustain sales. General Motors dangled 20 percent discounts nationwide on its Chevrolet, GMC and Buick brands in November, and luxury automakers revived annual promotions such as “the Season of Audi” and Lexus’s “December to Remember.” And even though Ford tightened some discounts, Sellers raised his own store’s sales numbers on Black Friday by opening at 5 a.m. and offering a 65-inch 4K TV to anyone who bought a new Ford that day.

Total light-vehicle sales probably rose about 3.8 percent in November, according to the average estimates of analysts surveyed by Bloomberg. After accounting for two extra selling days this November, the annualized rate is projected to drop to 17.7 million vehicles — still above this year’s average — from 18.2 million a year earlier, the strongest month of 2015. The projections reinforce the idea that industrywide sales, while at a high level, have plateaued and become more reliant on incentives.

Analysts’ estimates for individual companies are mixed. With incentives topping $10,000 on some Silverado pickups and Suburban sport utility vehicles, GM is projected to post a solid 9.1 percent November sales increase. Toyota Motor Corp. may rise 3.4 percent while other large foreign automakers including Honda Motor Co. log bigger gains. Ford, which cut back on fleet sales compared with last November, may fall less than 1 percent.

Fiat Chrysler’s U.S. unit is projected to report the biggest decline for the month, about 9 percent, after paring truck incentives compared with October. Estimates vary widely in part because the company has revised its sales history twice in recent months and analysts are using different year-ago figures for November 2015.

Incentives that were introduced in November may ultimately help determine whether 2016 ends up as a record seventh straight year with an industrywide sales gain. Many of the automakers’ deals pegged to Black Friday actually run all through November and some stick around the rest of the year.

“If this month’s forecast holds, December’s year-over-year sales only need to be flat to set a new annual record in 2016,” Jessica Caldwell, an analyst with Edmunds.com, wrote in an e-mailed statement.

Carjojo, a closely held company that offers to negotiate purchases for consumers who don’t want to haggle, said there are good deals to be had where models are oversupplied. Some sedans are overstocked as consumers prefer SUVs and car-based crossovers to traditional car models.

Lexus had more than a six-month supply ES 350 sedans on dealer lots, according to Carjojo, which was founded by Peter Levy, the former chief executive officer of auto researcher IntelliChoice. Given the heavy supply, the company says there’s a reasonable chance that Lexus will further increase discounts in December.


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