Data from the Bureau of Economic Analysis (BEA), shows that total light (cars and light truck/SUVs), vehicle sales in January were at a seasonally adjusted annual rate, (SAAR) of 17.505 million (M), units, down 724,000 units or 4.0% from December. On a three month moving average (3MMA), basis sales were tracking at 17.867M, down 1.7% month on month (m/m) and off 0.7% 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 January surged to 84 days, up 14 days month on month but flat y/y.

Figure 2 breaks-out auto, (car sales) from total light vehicle sales from 2010 to present. In January, car sales fell 317,000 units or -5.4%, m/m to a SAAR of 5.507M. On a 3MMA domestic car sales were down 4.3% y/y. Domestic SAAR car sales were at 4.169M, down 181,000 units or -4.2% m/m. On a 3MMA domestic car sales were down 4.4% m/m. Import sales dipped by 13,600 units or -9.2%, m/m to a SAAR of 1.338M. On a 3MMA import car sales were down 4% m/m. Import market share for cars stands at 24.3%, the same percentage as its previous 12 month average.

Figure 3 shows light truck sales history from 2010 to present. In January, light truck sales fell by 407,000 units 3.3%, m/m to a SAAR of 11.998M. On a 3MMA domestic light truck sales were lower by 0.4% m/m. Domestic SAAR light truck sales were 8.904M, down 389,000 units or -4.2% m/m. On a 3MMA domestic light truck sales were down 1.1%. Import sales increased by 18,000 units or 0.7%, m/m to a SAAR of 2.656M. On a 3MMA import light truck car sales were up 1.7% m/m. Import market share for light truck was at 20.8%, 0.1 percentage points lower than the previous 12 month average.

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 2.0% this January compared to January 2017, while light trucks managed a 0.5% y/y sales gain.

Medium and heavy truck sales decreased by 3,700 m/m to a SAAR of 438,000 units, a 7.8% m/m decline. The good news is that y/y sales of medium and heavy truck jumped 52.8% in January.

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 U.S. economy.