The U.S. auto industry closed out December to reach a third straight year of over 17 million cars sold. Overall, however, car sales were 1.8% lower in 2017 than in 2016, ending a 7 year streak of increasing auto sales. Taking a closer look at the numbers reveals several bright spots:
- Trucks and SUVs led the pack in sales growth and accounted for 63% of market share, up from 59.5% last year. Some of the vehicles seeing gains over last year were Ford F-Series Pickups (9%), Toyota Highlander (12%), Ford Explorer (10%), Chevy Equinox (20%), Honda CR-V (6%), Nissan Rogue (22%), and RAM Pickups (2%).
- Ford was one of the few automakers with a December sales gain. Ford increased sales by 1.3% over last year, driven by strong F-series sales performance.
- The industry saw a record high average cost per vehicle in December: com estimates the average sales price topped $36,000 per vehicle at year end.
Analysts are predicting 2018 will see a greater dip in domestic car sales, with predicted car sales under 17 million for the year. Fortunately, automakers can look forward to continued growth in higher-margin trucks and SUVs, as many trucks are looking at new model releases this year. Although a much smaller segment of new car sales, sales of hybrids and plug-in vehicles are also predicted to rise in 2018, with sales growing from 3% in 2017 to a predicted 4.4% in 2018.
In contrast, global auto sales are expected to rise in 2018. As reported in Forbes, BMI Research predicts “the world’s vehicle sales will rise by 3.6% in 2018, up from an estimated 3.3% growth in 2017.” This is largely driven by projected growth in emerging markets and Russia, even while China sales may dip.
The industry (and Dashboard Insights) will continue to closely watch how US tax reform, rising interest rates, and low unemployment combine to impact 2018 sales predictions.