The October 2023 SAAR data indicates a nuanced picture of the auto industry, showing a slight decline from the previous month but a notable increase compared to last year, with sales reaching the highest October level since 2020. While the seven-month streak of double-digit year-over-year SAAR improvements has ended, the overall trend remains positive with a steady recovery in the industry inventory-to-sales ratio and an increasing Days’ Supply. This detailed analysis, including insights on inventory levels, transaction prices, and future outlooks, provides a comprehensive understanding of the current state and projections for the auto industry.

The automotive industry has witnessed its fourteenth consecutive month of annual improvements in the Seasonally Adjusted Annual Rate (SAAR), with September 2023 recording a SAAR of 15.7 million units—a 14.9% increase compared to the previous year. However, we anticipate a potential end to the double-digit year-over-year improvements streak in the coming month. With challenges like the United Auto Workers strike and changing supply chain conditions, it remains critical to monitor consumer activity and sales trends, especially given the decline in transaction prices and surge in incentives.

The automotive industry in August 2023 saw a 13.6% year-over-year growth in SAAR (Seasonally Adjusted Annual Rate), marking the thirteenth consecutive month of such improvements. However, this growth is gradually tapering off, suggesting that the industry’s recovery is becoming more nuanced.

The July 2023 SAAR shows a consistent year-over-year growth in auto sales volumes for the twelfth consecutive month, reflecting the industry’s journey of recovery since mid-2022. While sales projections remain positive through 2023, the volatility of the auto industry over the last three years and potential economic factors warrant vigilance for the future.

A fundamental shift is underway in the industry, with manufacturers like Mercedes-Benz and Volkswagen moving towards a direct-to-consumer sales model, inciting mixed reactions from auto dealers and legal scrutiny in various states. Meanwhile, July 2023’s SAAR outlook remains positive despite looming recession concerns and the potential impact on consumer behavior.

The May SAAR saw a steady rise in national auto sales as the industry heads towards pre-pandemic levels and assesses key considerations for the second half of 2023. In this week’s post, we explore the balance of supply and demand, how inventory shortages and pent-up demand influence the market, and what may lie ahead in light of potential economic changes.

The April 2023 SAAR reveals a significant upswing in vehicle sales, with an 11.4% increase from April 2022. This marks the ninth consecutive month of year-over-year growth, emphasizing the improvement in vehicle availability. As we compare the inventory to sales ratio over the past three years, it’s clear that the industry has recovered from the pandemic’s impact on demand and supply chain shortages. Transaction prices are currently experiencing a slight normalization, while incentive spending is on the rise. With supply chain conditions gradually improving, the outlook for May 2023 remains optimistic. Read the full analysis to discover what this might mean for the automotive industry and potential buyers.

The March SAAR was 14.8 million units, down 1.2% from last month but up 9.3% compared to March 2022. Year-over-year improvements in the SAAR continue to persist as inventory is more available compared to this time last year. In fact, this month marks the eighth month in a row of year-over-year improvements in the SAAR and signals consistency in auto production and auto demand trends.

The February SAAR was 14.9 million units, down 6.3% from last month but up 8.6% from February 2022. Year-over-year increases in the SAAR have been a theme throughout the last several months. In fact, February 2023 marks the seventh month in a row that the SAAR improved from the year prior. Looking ahead, we believe that it is likely that year-over-year improvements will continue for several more months as nationwide inventory balances continue to recover.

The January 2022 SAAR was 15.7 million units, which is 18% higher than December 2022 and 4% higher than this time last year. This month’s data release revealed the fifth straight month of year-over-year improvements in the SAAR, supporting that inventory levels are actually recovering from the throws of persistent supply chain disruptions.

The December SAAR was 13.3 million units, down 5.3% from last month but up 4.7% from this time last year. This month’s SAAR data is a bit concerning for the auto industry, as supply chain improvements do not seem to be translating to improvements in the sales pace of vehicles as quickly as the last couple months have indicated. Over the past month, it has seemed more and more likely that plummeting trade-in equity, persistently high interest rates and growing fears of an economic recession are keeping the sale of automobiles low, which could spell trouble for auto dealers that have thrived in a high price environment over the past eighteen months.

The November 2022 SAAR was 14.1 million units, down 6.5% from last month but up 7.9% from November 2021. Compared to this time last year, vehicle availability has significantly improved, and there seems to be hope around the industry that the auto inventory crunch is in its final act. If true, this would be good news for auto dealers and consumers alike, as more units on dealer lots seem to be the first step in a “return to normal” for the industry. While it’s clear that a year-over-year improvement is present, a dip from last month’s SAAR figure may raise red flags for some of our readers. However, an additional selling weekend in October and a marginal uptick in sales due to natural disasters in the Gulf of Mexico were both tailwinds that supported a surprising improvement in the SAAR last month. Given this perspective, November 2022’s SAAR seems to return to the larger trend of improving conditions.

The October 2022 SAAR was 14.9 million units, up 12.7% from October 2021 and up 9.8% from last month. This month’s SAAR comes as a bit of a surprise, as the last three months’ sales pace settled at around 13.4 million units and seemed to have stabilized at a short-term equilibrium. However, meaningful improvements in inventory balances and other tailwinds like natural disaster-related demand contributed to the second-highest monthly SAAR total this year. For perspective, from 2014-2019, there were zero months where SAAR was below this recent high in the inventory-constrained 2022.

The September SAAR was 13.5 million units, up 2.3% from last month and up 9.6% from September 2021 when the industry had less than one million vehicles available for sale. While this month’s SAAR highlights a year-over-year improvement and gives us context around how low inventory managed to fall in 2021, this month’s data release does not indicate a “return to normal” by any means.

The August SAAR was 13.2 million units, down 1.1% from last month but up 0.7% from August 2021. This month’s data release, marks the third month in a row that the SAAR has been in the low 13 million-unit range, with the metric seemingly having stabilized in the short term. To illustrate this trend, over the last four months the average SAAR has been 13.1 million units.

Now that the August data has been released, we have much more visibility to what the full year SAAR might look like.

The July 2022 SAAR was 13.3 million units, an improvement from last month’s 13.0 million units but down 10.2% from July 2021’s rate of 14.7 million units. The SAAR continues to reflect depressed sales rates as supply chain shortages restrict volumes across the United States. This week we briefly discuss the July 2022 SAAR but focus primarily on the passing of the CHIPS-Plus bill and how it might affect auto dealers.

The June SAAR was 13 million units, up 2.3% from last month but down 16% compared to June 2021. This month’s release closes out the second quarter of the year, bringing the total Q2 2022 SAAR to 13.4 million units.

The April 2022 SAAR was 14.3 million units, up 6.5% from 13.4 million in March but down 21.9% from the recent high April 2021 SAAR of 18.3 million units. We dig into the comparison of the last three April SAAR figures (’20, ’21, and ’22) in this post, as dynamic conditions resulted in three very different narratives surrounding the SAAR.

The February SAAR was 14.1 million units, down 6.4% from last month and 11.7% below this time last year. The 2022 Q1 SAAR is expected to be the highest since Q2 2021 when the vehicle inventory shortage started to fully take hold. While the seasonally adjusted annual rate has certainly improved from the lows of late 2021, raw sales numbers tell a different story. Read more about it in this week’s post.