14 Jan 19

3% decline predicted for US auto sales

Auto sales in the US will decline by half a million this year to 16.8 million units, predicts the National Automobile Dealers Association (NADA).

Last year, new car and light truck sales in the United States added up to 17.3 million, up 0.6% versus 2017. This year’s figure will be closer to 16.8 million, i.e. a decline by 2.9%, NADA says in the run-up to the Detroit Auto Show. 

Strong fundamentals
The association stresses that the predicted decline is slight, and market fundamentals – a strong economy and low fuel prices – are expected to stay healthy.

However, Cox Automotive is less sanguine about the coming year in auto sales. Cox’s Dealer Sentiment Index fell from 51 in Q3 2018 to 44 in the last quarter of last year, meaning auto dealers were more negative than positive about the current market. For the first time in the survey’s history, the look ahead to next quarter – this quarter – also turned negative (49). 

Major OEMs all noted declining sales in December, from Ford (-8.8% compared to previous December) over GM (-2.7%) to Toyota (-0.9%, including -16.5% for its passenger car division). Fiat (+14%) and Nissan (+7.6%) posted gains, mainly thanks to their truck divisions.

Confident noises
Despite the bleak figures for December, most OEMs are making confident noises about 2019, buoyed by the fact that they will be launching a wide range of truck and crossover models this year – and those two segments are increasingly drumming the passenger car segment out of the market.

But Cox warns of trouble ahead: due to tax changes, fewer consumers may get a tax refund this year, and that could have a negative impact on consumer confidence, and ultimately on auto sales.   

NADA foresees light trucks further increasing their market share in 2019. Last year, SUVs and pick-ups represented 69% of total sales. Sedans declined from 35% to 31% - just 10 years ago, they still made up 52% of the total market.    

Authored by: Frank Jacobs