US Nov auto sales fall from Oct, rise year on year, but sector recovery unlikely until 2025

HOUSTON (ICIS)–US November sales of new light vehicle edged slightly lower from October but are up by 7.4% compared with the same month a year ago and by 12.2% year to date, but an ICIS economist expects sales to slump in 2024 before recovering to pre-pandemic levels.

According to data from the US Bureau of Economic Analysis (BEA), November sales came in at a seasonally adjusted annual rate (SAAR) of 15.3m units.

Kevin Swift, senior economist for global chemicals at ICIS, said he is projecting sales to edge slightly lower to 15.2m units in 2024 before rebounding strongly to 16.8m units in 2025 as the economy stabilizes and recovers.

For context, sales in 2019, prior to the pandemic, were 17.0m units.

Despite the slight decrease in November volumes, Patrick Manzi, chief economist for the National Automobile Dealers Association (NADA), kept his estimate for total 2023 volumes unchanged at 15.4m units.

The month-on-month decrease likely had more to do with elevated interest rates and lingering concerns of a recession or an economic slowdown keeping consumers from buying big-ticket items than with lost production from the United Auto Workers (UAW) strike against the Big Three automakers.

Manzi noted that inventory on the ground and in transit at the start of November was 2.15m units, which rose to 2.33m units by the end of the month.

November was the 15th consecutive month of year-on-year seasonally adjusted annual rate (SAAR) increases as the industry continues to work its way out of a sales slump brought on by supply chain issues related to the coronavirus pandemic.

BATTERY ELECTRIC VEHICLES (BEVs)
Total sales of battery electric vehicles (BEVs) so far in 2023 topped 1m units during November, NADA said, marking the first time BEVs have surpassed that total in a single year.

Speaking last week at the 17th ICIS Pan American Base Oils and Lubricants Conference in Jersey City, New Jersey, Swift said the number of internal combustion engine (ICE) vehicles is expected to peak in 2025.

ICE vehicles made up 83.4% of all vehicles sold in the US in November, as shown in the following chart.

CHEMS USED IN AUTOS
The sector is important to chemistry because a typical vehicle contains nearly $3,950 of chemistry – chemical products and chemical processing, Swift said.

Included, for example, are antifreeze and other fluids, catalysts, plastic dashboards and other components, rubber tires and hoses, upholstery fibers, coatings and adhesives, Swift said.

Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry.

The latest data indicate that polymer use is about 437lb (198kg) per vehicle.

Meanwhile, electric vehicles (EVs) and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for EVs.

Focus article by Adam Yanelli

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