By Nick Carey
DETROIT (Reuters) - Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rush to sell vehicles and boost their 2017 numbers before the year comes to an end.
Automakers are trying to sell down 2017 model year vehicles, offering high discounts to consumers as the year-end nears. In 2016, the industry reported record annual sales of 17.55 million units.
The seasonally adjusted annualized rate of U.S. car and light truck sales in November fell to 17.48 million vehicles, down from 17.71 million vehicles a year earlier, according to Autodata Corp, which tracks industry sales. This was roughly in line with the 17.5 million predicted by analysts polled by Thomson Reuters.
According to consultancies J.D. Power and LMC, discounts have been above 10 percent of the average transaction price for 16 of the last 17 months, a level experts say is unhealthy and unsustainable.
The November sales results come as the National Automobile Dealers Association said on Friday it expects new vehicle sales to decline to 16.7 million units in 2018, after dropping to 17.1 million for the full year in 2017.
If that forecast comes true, the race to move new vehicles off dealers' lots will only intensify next year.
Brandon Mason, a director at PwC's automotive practice, said a worrying trend for the industry was a rising number of subprime loans. He said subprime levels are at just over 20 percent of originations, against more than 30 percent prior to the Great Recession, but recent increases remain a concern.
"That's a bit of a red flag," Mason said. "It's something to keep an eye on as we move into 2018."
No. 1 U.S. automaker General Motors Co (N:GM) said its sales fell 2.9 percent in November, with sales to consumers flat against the same month in 2016. Much of the decrease was driven by lower fleet sales to rental agencies, businesses and government agencies.
GM said strong SUV and crossover sales pushed its average transaction price for the month above $37,000 for the first time. The company's level of unsold cars, which has been a concern for analysts and the industry, rose slightly to 83 days supply, from 80 days at the end of October.
"More vehicles are sold in December than any other month and we are very well positioned because we have momentum in so many segments, but especially in crossovers," said Kurt McNeil, U.S. vice president of sales operations.
Fleet sales are a low-margin business for automakers.
Fiat Chrysler Automobiles NV (FCA) (MI:FCHA) in particular has targeted a significant reduction in this type of sale in 2017.
The automaker posted a 4 percent overall decrease in sales for November, but said fleet sales were down 25 percent while sales to consumers were up 2 percent on the year.
No. 2 U.S. automaker Ford Motor Co (N:F) reported a 6.7 percent increase in sales in November, with fleet sales up nearly 26 percent and retail sales 1.3 percent higher than in November 2016.
Ford said SUV sales rose 13.3 percent in November, while its pickup truck sales were up 4.1 percent.
"November and December over the last few years has become a very big merchandising window for the industry," Ford's U.S. sales chief Mark LaNeve told reporters on a conference call.
He said price competition between automakers should continue into 2018, but it "should not be too disruptive."
Toyota Motor Corp (T:7203) said its sales were down 3 percent, while Honda Motor Co Ltd (T:7267) sales rose 8.3 percent.
Volkswagen AG (DE:VOWG_p) said its sales were down 1.6 percent.
Nissan Motor Co Ltd (T:7201) said in a statement a systems outage meant it would not post official November results until Dec. 4, but estimated its U.S. sales rose 14 percent versus November 2016.
GM shares closed down 30 cents at $42.79, FCA was off a penny at $17.09 and Ford ended up 8 cents at $12.58.