Data from the Bureau of Economic Analysis (BEA), shows that total light (cars and light truck/SUVs), vehicle sales in December were at a seasonally adjusted annual rate, (SAAR) of 18.237 million (M), units, up 383,000 units or 2.1% from November. On a three month moving average (3MMA), basis sales were tracking at 18.178M, down 1.2% month on month (m/m) and flat year on year (y/y).

Figure 1 shows the history of light vehicle sales (domestic plus imports), from 2010 to present. After a long slide between January and August 2017, sales have roared back to near record levels on an annualized basis. Per Ward’s automotive, day’s inventory at the end of the year was in great shape at 60 days. In unit terms, dealers held 3.74M, down 3.4% y/y.

Figure 2 breaks-out auto, (car sales) from total light vehicle sales from 2010 to present. In December, car sales fell 222,000 units or -3.7%, m/m to a SAAR of 5.831M. On a 3MMA domestic car sales were down 3.8% y/y. Domestic SAAR car sales were at 4.617M, down 205,000 units or -4.4%. On a 3MMA domestic car sales were down 4.3%. Import sales dipped by 16,000 units or -1.1%, m/m to a SAAR of 1.421M. On a 3MMA import car sales were down 2.1% y/y. Import market share for cars stands at 24.4%, down 3.7 percentage points from the previous 12 month average.

Figure 3 shows light truck sales history from 2010 to present. In December, light truck sales shot-up by 605,000 units 5.1%, m/m to a SAAR of 12.406M. On a 3MMA domestic light truck sales were higher by 0.1% y/y. Domestic SAAR light truck sales were 8.085M, down 328,000 units or -3.9%. On a 3MMA domestic light truck sales were 493,000 units, or 5.6%. Import sales increased by 90,000 units or 3.5%, m/m to a SAAR of 2.638M. On a 3MMA import light truck car sales were up 0.1% y/y. Import market share for light truck was at 21.3%, up 4.1 percentage points y/y.

Consumers clearly have a preference for light trucks, (which includes cross-overs, small, medium and large SUV and vans) over passenger cars. Cars sales were down 10.8% y/y, (midsize, -10.8%, small, -12.6%, luxury +1.8% and large -13.0%). Light duty trucks on the other hand were up 8.0%, (pick-ups +8%, total SUV/Cross-overs up 13.6%).

Medium and heavy truck sales had a great month as unit volume increased by 24,000 to a SAAR of 475,000 units, a 5.3% m/m increase. Year on year sales of medium and heavy truck was up 21.7% in December on a 3MMA comparison.

At Gerdau, we monitor production and sales of light, medium and heavy vehicles since they consume a tremendous amount of engineered steel. In addition, the health of the automotive industry offers an important gauge on the overall strength of the US economy.