US fleet sales rise sharply in 2019, but market forecasts are down for 2020

An 8.6% year on year rise in fleet sales helped US new vehicle registrations exceed 17million units in 2019, according to Cox Automotive.

This year is the fifth consecutive year that the US market has finished above the 17 million threshold, although forecasters predict that next year will be tougher.

Cox Automotive expects auto sales in the U.S. to have reached 1.58 million in December, which would elevate the annual total to 17.2 million units, about 1% down on 2018.

“This negative trend is expected to continue… into 2020,” said Cox Automotive.

“Fleet activity has been an important story for 2019 sales and the industry outlook going into 2020. Fleet sales are up significantly in 2019, as they were in 2018, and these gains have been supporting an otherwise declining retail market. With hundreds of thousands of additional fleet deliveries over the last two years, growth in 2020 from this high base will be challenging. However, without it, the vehicle market could fall significantly.”

Retail sales – both leasing and purchasing – fell in 2018 and 2019, and without fleet's support, Cox Suggests industry sales would be closer to mid-16 million levels.

This pessimistic outlook was echoed by the National Automobile Dealers' Association (NADA), which has forecast that new vehicle sales will decline by 1.2% next year in the US. If true, this would see sales dip below 17 million units for the first time since 2014.

In 2019, US consumers continued to abandon cars, which now account for fewer than 30% of sales, in favour of light trucks, which represent more than 70% of sales. NADA forecasts that this trend will continue in 2020, to reach a 25/75 split in favour of light trucks. That's a remarkable change from a decade ago, when cars still represented 52% of new-vehicle sales, versus 48% for light trucks.

US consumers value the practical advantages and right height of light trucks. The increased fuel efficiency of light trucks is closing the gap with that of cars. In the absence of a serious increase in petrol prices, NADA expects that the shift in US consumer preference from cars to light trucks is permanent.