Automakers won't report December sales until Friday, but all indications suggest the industry closed 2013 on a high note. CNW Marketing Research expects December sales to gain 10 percent versus December 2012, which means 2013 would see 15.7 million new-car sales — about 8 percent above 2012's 14.5 million, and the best year for auto sales since 2007. That's in line with what Tom Libby, lead analyst for R.L. Polk and Co.'s North American forecasting division, predicts.
Which automakers led the charge? Conventional wisdom says luxury brands. The top three sellers — BMW, Lexus and Mercedes-Benz — outpaced the industry's 8.3 percent rise with sales up 12.1 percent through the first 11 months of 2013. Consider that premium brands often push holiday incentives and it's likely they'll end the year with a sizable chunk of the car-sales pie. In fact, luxury-car sales overall — including GM's Buick division and Hyundai's Genesis and Equus but excluding Mercedes' Sprinter van — accounted for 12.7 percent of all new-car sales through the first 11 months of 2013. That beats the same stretch of 2012 (12.4 percent), according to Automotive News sales figures.
Luxury Gains? Not Just Yet
But luxury-brand executives shouldn't pop the Veuve Clicquot just yet. Compare this year's performance to the same period over the past eight years — when luxury cars hovered between 12.3 and 13.4 percent of the market — and it looks like 2013 is shaping up to be, well, average.
Still, the group should improve in 2014 as luxury brands offer more niche offerings, particularly among subcompact cars and SUVs. Mercedes' entry-level CLA-Class hit dealerships in September and became the brand's third-best-selling model by the following month. Audi has a redesigned A3 family on the way, and BMW's rumored next-gen 1 Series will come as a sedan. All three have crossover companions in the BMW X1 and forthcoming Audi Q3 and Mercedes-Benz GLA-Class.
"The CLA, the A3 sedan and the 1 Series," Libby said, represent "growth opportunities for luxury [cars] and for those brands, and they are going to take some sales from the next category up, which is C-Class and A4 and 3 Series, just because they're so close in size."
The influx of differentiation isn't as evident among non-luxury brands, which saw segment splitters like the Nissan Juke and Kia Soul arrive years ago. But shoppers are drifting from a few mainstream segments. For some, it's a blip on the radar. For others, shoppers have begun to look elsewhere.
Family sedans — including a few not-quites like the Chrysler 200 convertible and Honda Accord coupe that automakers lump into class sales figures — held 16.2 percent of the market through the first 11 months of 2013. That's down from 17.2 percent a year ago. Polk segments the market a bit differently, but Libby observes the same trend — and, he points out, 2012 was a "very, very high" year for family cars. This year's popularity, if diminished, is back to normal levels.
Small crossovers like the Toyota RAV4 and Honda CR-V, meanwhile, should end December strong. More than one in eight new cars sold through November was what Libby calls a "compact non-luxury crossover" — and it's a segment that, five years ago, accounted for less than 10 percent of new-car sales.
What took a hit? Minivans and full-size sedans. Both segments are down this year, extending a slide years in the making despite many new products in the past few years, particularly in the big sedan class.
Minivans "continue to be in decline, but it is less of a decline," Libby said. Expect fewer minivan sales in years to come: "It sort of stabilized, and also remember that Chrysler is going to drop the [Dodge] Caravan, and we're just going to have the Town and Country. … We'll see further decline there."
Full-size sedans, meanwhile, are on a deeper spiral. Libby says big, non-luxury sedans have lost some 40 percent of their market share during the past five years, and shoppers have shown little inclination to go back. "You have this segment that's adjacent to [full-size sedans], the midsize segment, that has a slew of great new products," Libby said. "That full-size non-luxury segment is under pressure long-term."
Pickups Pick Up
If the first 11 months of the year are any indication, December should cap another strong year for pickup trucks. Housing starts are a primary — but not the only — driver for pickup sales, and in November they hit their highest annualized rate since February 2008.
Pickups should keep rolling. The vast majority are full-sizers, which combined for 12.3 percent of new-car sales through November. That's up from 11.3 percent in same span of 2012. "If the housing market continues, and gas prices stay where they are, we'll see continued gain — [but] incremental," Libby said.
Will the popularity bring new life to midsize pickups? The segment was all but toast a few years ago, but GM has ushered in new possibilities with the redesigned Chevrolet Colorado that debuted at the 2013 Los Angeles Auto Show. The following month, Honda teased the next-generation Ridgeline.
Still, that doesn't mean the segment is back. "It's going to be a challenge for GM," Libby said. "The segment has dropped by 50 percent in five years. I think if gas prices stay the way they are, you're not going to see any growth."
The industry is healthy enough to take the gamble. Overall car sales should end 2013 up 51 percent since the worst year for auto sales during the recession, 2009. That means a segment that's weakening relative to the market — like family sedans — is still up in overall sales.
"In many ways 15.6 or 15.5 [million new-car sales] is slightly below pre-recession levels, but next year we'll be at pre-recession levels," Libby said. "The [auto] industry is different now in that the capacity is more aligned with demand, and so the manufacturers in general are more healthy. It's a good time to be in the industry."