Automotive MMI: U.S. auto sales decline in 2019, average transaction prices rise

The Automotive Monthly Metals Index (MMI) picked up three points, rising to a January MMI reading of 89.
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U.S. auto sales

General Motors reported it delivered 2.89 million vehicles in the U.S. market in 2019, up 12.7% compared with 2018.

“We’ve focused our resources on what our customers want – crossovers and trucks – and that has paid off,” said Kurt McNeil, vice president of U.S. sales operations. “In addition to our industry leading crossover sales, our full-size truck franchise is unmatched. We’re pleased with our full-size pickup launch and we look forward to launching our segment-leading, all-new full-size SUVs in 2020.”
However, in the fourth quarter GM’s sales fell 25% year over year due to the 40-day United Auto Workers strike, the automaker said.
GM touted its sales of more than 1 million crossovers for the second year in a row, with deliveries in 2019 up 12.7% to 1.17 million.
Ford, meanwhile, sold 601,862 vehicles in the fourth quarter in the U.S., down 1.3% on a year-over-year basis. Truck sales, however, were up 15.9%. Ford car sales were down 41.0%. For the full year, Ford’s 2019 sales of 2.42 million vehicles marked a 3.0% year-over-year decrease.
Fiat Chrysler saw its fourth-quarter sales dip 2.0%, down to 542,519 vehicles. Full-year sales of 2.20 million vehicles marked a 1.0% year-over-year decline.
Honda’s full-year 2019 U.S. sales ticked up 0.2% on a year-over-year basis, while its December sales dipped 12.0% year over year.
Toyota Motor North America posted December 2019 U.S. sales of 207,373 vehicles, down 6.1% on a volume basis and 2.4% on a daily selling day rate basis. For the full year, Toyota reported sales of 2.38 million units, down 1.8% compared with 2018.

Sales forecast: 2019 sales projected to drop 1.7%

According to a Dec. 23 forecast jointly released by J.D. Power and LMC Automotive, new-vehicle retail sales in 2019 were forecast to decline 1.7% compared with 2018.
Retail vehicle sales for December 2019 were projected to reach 1.27 million units, down 2.8% when adjusted for selling days.
“December’s soft performance closes the year on a down note, but another record for transaction prices reinforces that manufacturers are producing the type of vehicles that consumers want in the market,” said Thomas King, president of J.D. Power’s data and analytics division. “Record prices, however, have also been accompanied by record incentive levels, which signifies that there is still too much supply relative to overall demand.”
Meanwhile, average transaction prices increased in 2019. According to the report, the average transaction price was projected to reach a record $34,602, marking an increase of $673 compared with December 2018.

Changes on the horizon for the European auto sector

Recently, MetalMiner’s Stuart Burns outlined some of the changes and challenges ahead for the European automotive sector.
“An article in the Financial Times explains the impact of the new legislation on Europe’s automakers, an industry that supports some 14 million workers across the continent,” Burns wrote.
“Quoting Max Warburton, an auto analyst at Bernstein, the article says each carmaker faces its own CO2 target based on the weight of its vehicles. A business selling smaller cars, such as PSA, therefore has a lower CO2 target than a company with a heavier average vehicle, such as Mercedes-Benz owner Daimler.
“The targets for each company vary from around 91 g/km to just over 100 g/km. Some carmakers, like PSA, have already made good progress, switching less fuel-efficient, four-cylinder GM engines in their new Astra range to new three-cylinder PSA engines has improved efficiency by some 21%.”
Despite mandates aimed at curbing automotive emissions, it appears European consumers have taken a liking to the SUV.
“Europe — once the home of the small, fuel-efficient compact — has fallen in love with the SUV.  Some 40% of cars sold in the E.U. are now SUVs and automotive carbon emissions have, as a result, risen for the first time in a decade,” Burns continued.
“Potential fines for missing these new fleet emission limits are punishing, the FT states. Every gram over the target incurs a penalty of €95 — multiplied by the number of cars sold by the carmaker, the costs could be crippling. ‘It’s just stunning how much is going to have to be achieved in the next 18 to 24 months,’ Warburton is quoted as saying.
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“If the industry sold exactly the same mix of vehicles in 2021 as it did last year, carmakers together would face penalties of €25 billion, the Financial Times reports.”

Actual metals prices and trends

The U.S. HDG price rose 4.5% month over month to $833/st as of Jan. 1. U.S. shredded scrap steel increased 18.3% to $278/st.
The LME three-month copper price jumped 5.8% to $6,215/mt.
The Korean 5052 aluminum coil premium rose 3.5% to $3.22/kg.