U.S. new-vehicle sales beat expectations; likely lower in 2019

Analysts were somewhat surprised by 2018’s modest sales gains, as the year finished at 17.2 million new-vehicle sales nationwide, up 0.5 percent from 2017. December’s SAAR was 17.51 million, up 1.5 percent from December 2017.

 

Auto sales were helped by low interest rates and the continuing effects of the 2017 tax cuts, which helped drive fleet sales.

 

Light truck sales, including SUVs and crossovers, reached a record percentage of light-vehicle sales, at 69.2 percent, thanks to low gas prices, while cars had their lowest share ever. Those trends are increasing even in the Washington area, where buyers have long preferred cars to trucks. The latest Washington area auto sales report from R.L. Polk, which WANADA members may access as a member benefit, showed a light truck market share of 60.3 percent through September 2018.

 

The estimated average transaction price for light-duty vehicles was $37,577 in December, said Kelley Blue Book. New-vehicle prices increased 1.3 percent from December 2017.

 

Higher transaction prices are good news for dealers. But some analysts are worried vehicle prices will become so high that buyers will be pushed towards used vehicles, or priced out of the market completely.

 

Another worry about 2019: is that higher interest rates and lower incentives could dampen sales. NADA Senior Economist Patrick Manzi, who forecasts 16.8 million new-vehicle sales this year, also says an increasing supply of late-model used vehicles will put pressure on new-vehicle sales.

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