Reply #38: Trucks Outsells car in December, is like Ice Creams sales fall in December [View All]

[happyslug]

When do most people buy cars, In the Fall, September, October and into November, then ALL vehicle sales drop off till the following Spring when it picks back up starting in March, and then big sales in April and May (June, July and August is when most people go on vacation, so sales occur before then, but the drop in the Summer is no where near what it is in December, January and February).

Thus the fact SUV and Trucks outsell Cars in December is almost meaningless (The same with the drop in Hybrid sales, meaningless given most people do NOT buy cars in December anyway). Like my comment, less Ice Cream, is Sold in December then July, why? Because it is WINTER and the weather is COLD outside (I am talking about the North American Market, other markets have different sales history for example I suspect Australia has more balance sales given its overall warmer weather then the United States and Canada). I will NOT be surprise if this continues into February 2009, for the same reason MOST PEOPLE ARE NOT BUYING VEHICLES THIS TIME OF YEAR.

Who is buying vehicles? First are business people who need a truck for hauling. This increases trucks sales (Through NOT SUV sales). Many of these people, do to the economy and the high price of fuel, did NOT buy a new Vehicles over the last two years, even when it needed to be replaced. Now many of these same people HAVE to replace their vehicles, they delayed the purchases as long as they could. This pushes up Truck sales.

Another, and I suspect smaller group, need a new car but it is winter and in the Northeast SUV sales are pushed by Winter weather. It has been one of the worse winter in the last five to ten years and worse is expected in the next few months. Thus SUV sales will increase if you are in a market for a new Vehicle during this time of the year. These buyers are looking for good deals and can wait, whatever they are driving today is working, so they can wait, but they want the best deal they can and in the winter SUVs look better and better (especially the newer smaller cross over SUVs, which get much better fuel economy then the older truck based SUVs).

A third group are people whose car "died" and needs to be replaced ASAP. This may be do to an accident and insurance is paying for the car, or the car needs to be replaced. These customers need a car TODAY to get to and from work (Or for whatever reason they used their old car). These are the people who will look at the lowest down payment and the lowest price even if the cost of operating the Vehicle is high. They different from the group above in that they can NOT wait, they need the car TODAY. These are the people most likely to buy a truck based SUVs for they can NOT wait for any cross-over to get to their local dealer. They still want a good deal, but will buy what the dealer has as opposed to what they would buy if they really had a choice.

Notice all three of the above groups will buy an SUV, three different types of SUVs, Trucks for the First group, Cross-over (small) SUV for the Second, and truck based SUVs for the third. The numbers being cited, "Trucks and SUVs" implies to me that truck sales are up, do to the first group I mentioned above, while SUV sales are Steady (Otherwise SUVs would be mentioned separately, for they are the most profitable). Come Spring when more people start to look at new cars I suspect Cars to outsell Trucks and SUV again (With Spring and Winter totals, when added together, clearly showing Cars outselling Trucks and SUVs).

Remember the old saying, "Figures don't lie, but liars Figure" i.e. people cites statistics they like even if the statistic is meaningless. Vehicle sales in December in terms of Cars vs Trucks and SUV is meaningless, it is overall sales that is important and for that you look at year to year data and such data clearly shows cars winning this sales race since February 2009.