After U.S. sales peaked at 17.55 million in 2016, the auto industry has avoided a steep decline, steadily coasting on annual sales of more than 17 million. Another stable year appears to lie ahead, aided by multiple factors, such as affordable interest rates and low unemployment rates.
In 2019, "across all segments, the industry [was] fairly flat, which is not a bad thing," said Steve Germain, CEO of Germain Motor Co., a dealership group with more than a dozen stores in Ohio, Michigan and Florida.
"I think that in 2020, we can expect more of the same as we did in 2019, some brands up and some brands down. I see opportunities to grow a bit and continue with the used-car business," he said.
This year, automakers plan to introduce more than 60 new or refreshed models, according to LMC Automotive and J.D. Power.
"Prospects for 2020 are shaping up to be quite stable, though volume is expected to be a bit lower," said Jeff Schuster, president of the Americas operations and global vehicle forecasts at LMC. "Manufacturers will face a lot of pressure to stand out in a crowded market with nearly 60 percent more redesigned or new entries in 2020 than there were in 2019."
LMC and J.D. Power expect total light-vehicle demand of 16.8 million vehicles in 2020, slightly lower than last year. The final 2019 figures will be clear on Monday, Jan. 6, when Ford Motor Co. reports its sales. After most automakers on Friday, Jan. 3., reported December declines — including Nissan's 30 percent tumble — the industry's ability to eke out another year above 17 million was thrown into doubt.
As average transaction prices rise and negative equity levels remain high, affordability continues to be a concern. But in December, the average interest rate on a new-vehicle loan fell for the third straight month to 5.4 percent, the lowest rate since February 2018, according to Edmunds.
"The fact that rates have been on a steady decline for the last several months bodes well for more favorable financing conditions in 2020," said Jessica Caldwell, executive director of insights at Edmunds.
For the automakers, mastering product development and launch cadence is crucial, said Germain.
"It's a tough call to make as far as predicting consumer expectations and desires," he said.
One development that few would have predicted a year ago was a changing of the order in pickup sales. But Fiat Chrysler's Ram outsold the Chevy Silverado on an annual basis for the first time to rank as the industry's No. 2 full-size pickup.
"When people would shop for pickup trucks, there were only two considerations: Ford and Chevrolet," said Steve Kalafer, CEO of Flemington Car & Truck Country, a dealership group in Flemington, N.J., that sells each Detroit 3 pickup brand.
"Ram has become such an important brand that GM has ceded their leadership," he said. "It's almost unfathomable."
Ram outpaced the Silverado by 58,094 vehicles.
After FCA launched a redesigned Ram 1500 in 2018, it continued to build the previous-generation model, the Ram Classic, which weakened the Silverado's edge.
Ram then boosted its momentum by offering hefty incentives on the Classic.
Ford's F series has led the pickup segment for more than four decades and had chalked up more than 662,000 sales through September, enough to win another title as the best-selling vehicle in the U.S.
Silverado sales fell 1.7 percent to 575,600 for the year, while Ram pickup sales climbed 18 percent to 633,694.
Ram has a more direct and attainable marketing strategy than Chevy, said Kalafer. "The proof is in the pudding," he said. "Would you have ever thought Ram would outsell" Silverado?
Car sales volume continued to shrink in 2019. Many automakers faced significant losses in the sedan market, though some of those were strategic.
General Motors' car volume, for example, plunged nearly 30 percent, while light-truck sales rose 4.4 percent. FCA's car sales fell 5.8 percent while its trucks were down 0.9 percent. Toyota and Lexus' car volume decreased 4.9 percent, while truck sales were flat.
"It continues the consumer trend of what we have been seeing the last three to five years ... consumers flipping from cars to trucks and SUVs," said George Augustaitis, director of industry and analytics at CarGurus.
As automakers continue to launch new or redesigned pickups, crossovers and SUVs and discontinue many car nameplates, Augustaitis said, "it feels like it's starting to become a self-fulfilling prophecy."
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January 06, 2020 at 12:00PM
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Lower but stable sales in the US in 2019 - Automotive News
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