A strong economy has apparently buoyed new automobile sales to yet another strong year, with automotive analysts reportedly expecting total new car sales to eclipse the 17 million unit mark for the fifth straight year.
According to The Detroit News, auto dealers were able to overcome hurdles including trade-policy uncertainty, the longest federal government shutdown in a generation, a UAW strike that lasted more than a month, impacting suppliers and retailers who sell General Motors models, and warning signs early in the year of another impending economic downturn that has, at least, not yet materialized.
Overall, the News reports that automotive analysts anticipate the final sales number to be at 17.1 million, a 1.3 percent decline from 2018. Interestingly, though, the analysts only anticipate a 1 percent year-over-year decline in Quarter 4, which included the lengthy General Motors strike. Analysts in the News story cite the Federal Reserve’s decision to cut interest rates over the summer as another action that helped counter-balance other negative economic indicators that may have slowed the industry down further.
Nationally, SUV sales are anticipated to have made up more than half of all new auto sales in the United States in 2019, with pickup trucks now representing 1 out of nearly all 5 new-vehicle sales in the country. Reflecting this trend, several manufacturers have aggressively phased out traditional sedans, including Ford and Chevrolet. Ford has essentially stopped selling sedans entirely.
As for 2020’s prognosis, analysts are somewhat split, with Edmunds anticipating a slight increase over 2019, but Cox Automotive predicting a decline of roughly 400,000 units sold nationwide. Among Cox’s concerns are the high levels of household debt that consumers have, a number that is beginning to approach (and in some sectors has long eclipsed) the consumer debt burden of the mid-to-late 2000s, right before the Great Recession. It seems clear that the future of the new-car industry largely hinges on overall economic indicators.
Washington area-specific numbers for the full year will not be released by R.L. Polk for another couple of months.Download Bulletin PDF