US car sales up in 2018, slowdown expected for 2019
In spite of fears of a cooling car market, US carmakers have reported a modest increase in the number of vehicles sold for the full year of 2018. Analysts fear the downturn may come in 2019 but carmakers remain bullish.
Low unemployment, tax cuts and low fuel prices paved the way for carmakers to deliver another strong year. Part of the reason for the good results may be less positive, as fear for an all-out trade war with China and increasing trade tariffs are oft-quoted motivations to replace vehicles sooner.
According to Edmunds.com, 17.3 million vehicles were sold in 2018, compared to 17.2 million in 2017. Cox Automotive projects a number of 17.2 million. The industry appears to have achieved its fourth straight year above 17 million vehicles. Nevertheless, sales have been falling since hitting a 17.6 million peak in 2016.
In 2018, cars represented 30% of sales, down from 43% in 2015 and the decline is expected to continue. Analysts on Edmunds.com project about 1 in 2 vehicles sold in 2019 will be SUVs or crossovers.
Kelley Blue Book estimates the average transaction price for light vehicles in the US was $37,577 in December 2018, a 3% increase and the strongest growth in transaction prices since 2013.
As interest rates are increasing the cost of car finance and the stock market is struggling, the year 2019 may not turn out to look quite as good. Moreover, rising interest rates and carmakers that are realigning their portfolios to discontinue conventional cars in favour of more expensive and profitable SUVs and pickup trucks, risk pricing consumers out of the market.
For 2019, forecasts predict the industry could sell between 16.8 million and 17 million vehicles, dropping below the 17-million mark.
“Despite recent market turbulence,” said Ford Chief Economists Emily Kolinski Morris, “the data we have in hand suggest an economy that remains on solid footing heading into the new year. Consumers seem to be looking through market volatility to focus on continued positive job and income conditions.”
- GM: -1.6% (2.954 million vehicles)
- Ford: -3.5% (2.497 million vehicles)
- Toyota: -0.3% (2.426 million vehicles)
- FCA: +8.5% (2.235 million vehicles)
- Honda: -2.2% (1.604 million vehicles)
- Nissan: -6.6% (1.345 million vehicles)
- Subaru: +5% (680,135 vehicles)
- Hyundai: -1.1% (677,946 vehicles)
- Kia: no change (589,673 vehicles)
- Volkswagen: results for 2018 not yet available, +5.8% in December 2018
- Tesla: +138% (245,240 vehicles)
For the first time in almost a decade, new vehicle sales in Canada went down in 2018, dropping 1.9% compared to the previous year with a total of 2,000,506 vehicles sold. The last time annual new-vehicle sales fell was in 2009, when they lost 11% at the height of the global financial recession.
Nevertheless, the industry remains upbeat. David Adams, president of Global Automakers of Canada, told Automotive News that it is difficult to classify 2018 as disappointing from a sales perspective when looking at all the political and economic turbulence. After a decade of record upon record, things are going to slow down at some point.
The Ford F-series pick-up truck retained Canada's title of best-selling vehicle, as did the Honda Civic as the best-selling passenger car.
Image: new Tesla Model 3 vehicles on a car transporter in California, December 2018.