Since the 2008 financial crisis, US car sales have been making a comeback, topping 17 million light vehicles since 2015, for the first time since 2001. Car sales started dipping toward 17 million in 2017, though, and forecasts predict further slowing of the automotive market, perhaps 16.8 million for 2018. September 2018 marks the end of 3rd quarter sales, and the results were encouraging, topping 1.4 million units. It even helped bump the seasonally adjusted annual rate (SAAR) back up over 17.3 million vehicles, but not everyone is celebrating.
September 2018 Car Sales Winners and Losers
Fiat Chrysler Automobiles (FCA) posted the biggest gains in September, driven by higher Dodge, RAM, and Jeep sales. Dodge led the way with 40.6-percent increased sales, Alfa Romeo 29.3 percent higher, Jeep 14.1 percent higher, and RAM 9.2 percent higher.
In fact, FCA posted its highest sales in nearly two decades, a full 25 percent of those sales increases going to fleet expansions and replacements. Much of FCA’s success can be attributed to its new focus on SUVs and CUVs, which is proving to be more popular than sedans and hatchbacks. Not all FCA sales were golden, though, such as Chrysler, down 6.8 percent, Jeep Renegade, down 9.9 percent, and Fiat, down a staggering 46.3 percent.
On the other hand, where there are winners, there are losers. Ford and Japan’s big-three all posted declining US car sales in September 2018. Though the Ford F-150 series is still the Nation’s best-selling vehicle, and Ford accounted for 13.1 percent of overall sales, the rest of the lineup didn’t do so well, a 17 percent drop overall. Lexus was down 6.1 percent, Toyota down 10.9 percent, Nissan down 13.3 percent, and Mazda down 17.4 percent.
What’s Going On?
Analysts suggests the drop is a result of consumer’s preferences tending towards SUVs and CUVs, which favors automakers specializing in these. Sedan and hatchback sales are dropping, while truck sales remain steady. Overall car sales in September 2018, though, are dropping most likely do to higher interest rates and higher vehicle pricing.
Compared to last year, average new car financing interest rates have jumped a whole point, from 4.8 percent last year to 5.8 percent this year. In September 2018, just 5.6 percent of buyers can take advantage of 0-percent loans, down from 10.1 percent last year. Finally, the average new car is getting more expensive. Average new car prices in September 2018 were $35,742, two percent higher than last year.
Forecasters suggest the US car sales slump is only temporary, though. If the economy stays strong and the Federal Reserve Bank isn’t too aggressive setting interest rates, we could see annual car sales topping 17 million in 2019 and 2020. Only time will tell if current trends will continue, and whether Ford and Japan can crawl their way back to the top.