Steel Markets
November 22, 2016
US Vehicle Sales and NAFTA Vehicle Production in October 2016
Written by Peter Wright
Vehicle sales rose to 18.0 million on a seasonally adjusted annual rate basis in October. This was the best result since November last year. Average monthly sales in the first ten months of 2016 have been 17.4 million units. A pace above the 17 million SAAR rate should continue through next year as the labor market tightens and incomes rise. However there is a cloud on the horizon. Vehicle sales may face financing headwinds for two reasons. First, the Federal Reserve is likely to enact a second rate hike next month. If this is the case, then rising rates will begin to chip away at the availability of low interest loans. Second, rising delinquencies could induce lenders to tighten lending standards. Delinquency and write-off rates have increased for recently originated auto loans.
Figure 1 shows auto and light truck sales through October.
