Home » Americans Projected To Spend A Record $44.5 Billion On New Cars This Month

Americans Projected To Spend A Record $44.5 Billion On New Cars This Month

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Forget “December to Remember” because we’re in the middle of the “November To Never Forget” or, something — I don’t know. I’ve been listening to the André 3000 flute record and my mind is pretty blown right now. Also mind-blowing is just the amount of money people are going to spend on cars this month.

And it’s not just in the United States; data from the European Union shows just how anxious those buyers are to finally get into cars, which is notable given that it’s still not the most ideal time to be buying a car. Specifically, European consumers are dropping diesels for hybrids and EVs.

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It’s also not an ideal time to be a Ford or a GM exec, as both of those companies are having to scale back ambitions in the face of some cold realities. For Ford, that means tightening up its battery plans and, for GM, it’s realizing that maybe the pivot to being more like a tech company isn’t going to be as easy as it seemed at first.

Aight, I gotta keep dry-brining this turkey; let’s do this Dump and keep moving.

November Sales Projected Up 10.2% As The Pocketbooks Open

2020 Ford Escape 4dr Suv Se Fq Oem 1 1600
Photo: Ford

While interest rates remain high, there are finally vehicles on dealer lots and, with the end of the year approaching, it seems like a lot of consumers aren’t willing to wait any longer. This means sales for cars are expected to increase and, with a still high average transaction price, Americans are likely to set a monthly record for the most money spent on new cars.

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Specifically, the numbers from JD Power/Global Data show a total of $44.5 billion projected to be spent on new cars in just the month of November. That would be the highest amount ever recorded for November and up 9.5% from November 2022.

Not only that, sales growth is up, with an expected increase of 13.0% year-over-year in November to crest 1.04 million units.

What’s going on here? From J.D. Power’s data guy Thomas King:

“Sales growth is being enabled by improving vehicle availability. Despite the nearly six-week UAW work stoppage, retail inventory levels in November are expected to finish around 1.6 million units, a 7.5% increase from last month and 43.7% increase compared with November 2022, but still over 40% below pre-pandemic levels.

“However, as inventory and sales volumes improve, the average new-vehicle retail transaction price is declining to $45,332, down $873—or 1.9%—from November 2022. However, even with the decline in average transaction prices, consumers are on track to spend nearly $44.5 billion on new vehicles this month—the highest on record for the month of November and 9.5% higher than November 2022.”

There’s more good news for consumers here, which is that only 21.4% of cars are selling for above MSRP according to the data. Last November, that number was 37.1%

High interest rates are still a bummer for consumers and dealers, but the good news for dealers is that, while profits are down 20.5% year-over-year, they’re up about 83.9% from November 2019.

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All of this points to more of a normalization in the car market. Yes, transaction prices are high. Yes, interest rates are high. But there are more cars and consumers are ready to buy. I still think there’s increased inventory to come and greater incentives to be had so, if you can wait,  that’s not a bad thing.

However, if you don’t want to wait or your specific car has a great deal going, it’s not unreasonable to come off the sidelines.

Hybrids, Electric Cars Outsold Diesels In Europe

Small 20882 Newclioe Techfullhybrid
Photo: Renault

While most of our European friends will not be enjoying roast turkey and all the fixing this week, car companies there can at least take comfort in a big increase in sales.

Per Reuters:

New car sales in the European Union rose 14.6% in October, boosted in part by a big jump in sales of fully electric cars, while hybrid electric vehicles accounted for nearly three of every 10 vehicles sold in the economic bloc.

Sales of fully electric cars rose 36.3% from a year earlier and full hybrid sales were up nearly 39% as the EU recorded its 15th consecutive month of sales growth, the European Automobile Manufacturers Association (ACEA) said on Tuesday.

The ACEA said fully electric cars made up 14.2% of sales in October, overtaking sales of diesel cars for the third time.

Here’s a big detail: hybrids are almost 30% of the market and EVs are another 14.2%, with diesels accounting for about 12% of sales in the EU last month.

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It was probably inevitable, before Dieselgate, that diesels would slide in popularity as hybrids and EVs started to expand in the market. The speed with which it’s happened is amazing, however.

In 2015, diesels made up more than half of all car sales in Europe, so the drop to barely 1-in-10 in less than ten years is pretty astounding.

GM CEO Mary Barra’s Plans Not Looking So Great Right Now

Investor Relations Meeting At Gm Tech Center
Photo: Steve Fecht/GM

GM’s plan to become more of a tech company has run into the harsh reality of how difficult it is to be a tech company. Specifically, the departure of Cruise CEO Kyle Vogt and the company’s ongoing battery production issues are making her plans to increase revenue to $280 billion annually by 2030 seem a little bit more like a fantasy.

According to this Automotive News report, Barra was banking on $50 billion in revenue from Cruise which, given what’s going on now, seems like a stretch. It’s only 2023, so there’s still plenty of time to correct everything, but it won’t be easy. Here’s a great quote pairing from that article:

“There’s a big difference between strategy and execution,” said Sam Abuelsamid, research analyst at Guidehouse Insights. “They just have not been able to build batteries and they took their eye off the ball with Cruise.”

Jim Cain, a spokesperson for GM said in an email, “we haven’t changed our long-term targets but our immediate focus is on the 2023-2025 timeframe when we will be scaling EV production and advancing our other growth initiatives.” A spokesperson for Cruise declined to comment.

Building cars is hard! Building cars while pivoting to being a “tech company” seems even harder.

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Ford Cutting Back On Michigan Battery Plant

Jim Farley Ford

The proposed Ford plan to build a large LFP battery plant in Marshall, Michigan is moving forward after delays, albeit at a much smaller scale.

Initially, Ford’s grand plans called for a $3.5 billion investment and included a big event with Michigan Government Gretchen Whitmer.

This all-new battery production facility in Michigan will add approximately 35 gigawatt hours per year of new battery capacity for Ford in the U.S. initially – capable of powering approximately 400,000 future Ford EVs.

“Ford’s $3.5 billion investment creating 2,500 good-paying jobs in Marshall building electric vehicle batteries will build on Michigan’s economic momentum,” said Michigan Governor Gretchen Whitmer. “Today’s generational investment by an American icon will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification. Let’s continue bringing the supply chain of electric vehicles, chips, and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state. Since I took office, we’ve secured over 30,000 auto jobs and landed multiple electric vehicle and chip-making factories. We’re on the move, so let’s keep our foot on the accelerator.”

Well, not quite. Here’s the Ford update on all that:

We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation. However, we are right-sizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs to produce a planned capacity of approximately 20 GWh.

We still expect BlueOval Battery Park Michigan to be the first of Ford’s battery plants of this kind when it begins producing LFP battery cells starting in 2026.

So what happens to all of those subsidies Ford asked for in order to build the plant? From The Detroit Free Press:

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Michigan House Republican Leader Matt Hall, R-Richland Township, suggested lawmakers could push to nix proponents of the subsidies altogether.

“If the original proposal misrepresented Ford’s plans, the hundreds of millions of dollars tied to job creation should be revoked under the contract. The governor must right-size state funding and ensure taxpayers aren’t left on the hook for her failure,” Hall said in statement Tuesday.

Building cars is hard!

The Big Question

Two big questions:

  1. What’s the November equivalent of “December to Remember”? Please help me come up with a name.
  2. What are you most looking forward to eating this week?

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Xpumpx
Xpumpx
3 months ago

No Nissan November?

Frank Smith
Frank Smith
3 months ago

Is the ratio of paid members that are from Southern California on par with expected? Because I can’t help but think that the involvement of Galpin senior management and cross-promotions isn’t doing any favors.

Or maybe it’s just me who’s never had a satisfactory experience with them. Like the time they tried to sell me a brand new RX-8 without the factory installed rotor-shaped gear knob.

Iwannadrive637
Iwannadrive637
3 months ago
  1. November get those damn Medicare supplement ads out of my mailbox! It doesn’t roll off the tongue but I mean it.
  2. About three hours after everyone is gone, I enjoy a cup of coffee and a donut. Something I started years ago. I don’t know why.
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