New Car Sales Projected to Decline During the Last Third of the Year
Despite strong sales during the majority of the year so far, new car sales are expected to fall during the last four months of 2018
At the beginning of the year, automotive analysts predicted that 2018 sales would be significantly lower than 2017 sales. Contrary to those predictions, sales in 2018 have generally held pretty steady or have even increased compared to sales a year prior.
However, the sales slowdown that automakers have feared may soon be on the way. A new report suggests that the last third of the sales year will be rather rough for new car sales.
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Signs of a downward sales trend have already begun to emerge. Sales for August were down by 0.2 percent.
At first, that loss doesn’t appear significant. Yet, automakers lost out on new car sales due to Hurricane Harvey striking the Houston area during late August of last year.
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Right now, economic conditions are ideal for new car sales. Unemployment is low, while the stock market is healthy. Yet, analysts explain that consumer buying conditions are actually worsening.
Meanwhile, the average transaction price for a new vehicle model is on the rise. While this means more profit per vehicle for automakers, it may also deter many consumers from buying new.
Finally, while sales for SUVs and crossovers are up, sales for sedans are way down. In fact, passenger car sales are currently set to hit their lowest point since 1958.
When Hurricane Florence strikes the Carolina Coast later this week, new car sales are sure to suffer throughout the area. Still, new cars sales increased by a large margin in September of last year after Hurricane Harvey, so October sales might experience a similar boost following the aftermath of Florence.
Perhaps the auto industry can maintain its current rate of strong sales throughout the rest of the year. Yet, it seems increasingly likely that sales may take a downward turn during this time.
News Source: Automotive News (subscription required)
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