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January Auto Sales: Expect Cold Numbers

Auto Sales Drop
Auto Sales Drop

Strange as it sounds, January auto sales could wind up being worse than the dismal numbers we saw in December.

While that may lead some people to think the auto market and consumer are getting weaker, the reality could be far different.

January sales are expected to come in at a sales pace of under 10 million vehicles. That would make January one of the weakest months for auto sales since the early 1980's and would be a decline from the pace we saw in December of 10.31 million.

So why should we not look at the lower sales pace as a sign the economy is weakening further?

The main reason is because December sales included a decent amount of fleet sales to companies, auto rental companies, government agencies, etc. We will not see big fleet sales in the January number and as a result, the pace could come in noticeably lower. Some are predicting a pace of 9.6 million vehicles.

The Big 3 will all likely be down between 30% and 45% compared to January of last year. The foreign auto makers won't be much better.

What's the one sales stat I'll be looking at today?

I'll be curious to see the demand for hybrids and fuel efficient compacts. Gas prices stayed in check last month and it will be interesting to see what the demand was for those "gas sippers" in that environment.

First numbers come out at noon from Ford.

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