U.S. vehicle sales fell modestly in November

• U.S. vehicle sales fell 0.8% month-on-month (m/m) to 15.3 million (annualized) units in November – coming in below consensus expectations for 15.5 million units.

• Unadjusted sales volumes were 1.22 million units or 7.3% above year-ago levels. The average daily selling rate (DSR) was 48,746 – calculated over 25 days – up from November 2022's 45,419 daily rate.

• Passenger vehicle sales declined 2.4% year-on-year (y/y) while sales of light-trucks were up by 9.9% y/y. Light-trucks accounted for 81% of last month's sales, slightly higher than its 79% share in November 2022.

• Light vehicle sales missed out on the typical post-Thanksgiving bump in November as the previous UAW strike continued to impact deliveries at General Motors, Ford, and Stellantis. However, with the peak impact of the strike in the rearview and production now approaching its pre-pandemic level, inventories are expected to continue normalizing.

• Demand for automobiles has remained solid through 2023 as pent-up demand, excess savings, and a tight labor market pushed sales volumes notably above last year's supply-constrained levels. Looking forward, the convergence towards the pre-pandemic pace of sales is expected to become progressively more difficult as these tailwinds recede. That said, a recovery in incentive spending (which is still historically low as a share of transaction prices) and/or moderating prices could give sales a boost in 2024.