LOS ANGELES —
Robot vehicles might rip apart the business model of the car
industry in the coming years, but for now, automakers are still
selling lots of cars and light trucks.
U.S. sales for
2017 are expected to come in at 17.2 million vehicles, to be
adjusted slightly up or down this week as more companies report
That’s down from
17.55 million in 2016, a record high. But it’s still considered
healthy, especially considering how many people bought cars and
trucks over the past few years.
It appears the
cyclic downturn could be gentle, given the strength of the U.S. and
“A lot of the
strong economic news has translated into consumers going out there
and buying new vehicles,” said Charlie Chesbrough of market research
firm Cox Automotive. “We’re looking at the stock market at record
highs, unemployment rates essentially near full employment and
interest rates at a still-affordable level.”
results were stronger than expected, largely driven by a U.S.
economic growth rate near 3 percent, compared with about 1.2 percent
as the year began, he said.
softening of demand is likely to push sales down to 16.7 million
vehicles or so this year, analysts say. The new tax bill will
withhold less money from most people’s paychecks. That could goose
the number a bit, but rising interest rates could cancel that out by
boosting monthly car-loan payments, said Alec Gutierrez of Kelley
Blue Book. “For a lot of consumers, an extra $20 a month is a big
But for many
others, price sensitivity isn’t a big issue. The average cost of a
motor vehicle hit a record high in 2017, at $36,113, largely driven
by the continuing growth in pickup sales.
While sales at
General Motors, Toyota, Fiat Chrysler and Honda all fell a few
percentage points in December, Ford was up 1.3 percent on the
strength of its trucks, especially the enormously popular FSeries
pickup. The F-Series repeats as the best-selling vehicle in the
U.S., according to Motor Intelligence.
“If a company is
strong in pickup trucks and sport utility vehicles, they had a great
year,” said Michelle Krebs, senior analyst at Autotrader. “If they
were heavier on cars and sport utilities, then less so.”
The shift to
trucks, SUVs and crossover vehicles looks like it’s here to stay.
For the first time, the majority of Audi’s sales were in SUVs and
Gas mileage not
is not as important to consumers, analysts say, and not only because
gas prices are low. Fuel efficiency has made tremendous gains even
in larger vehicles since 2009, when the industry agreed to tough
fuel economy regulations with the Obama administration in return for
a federal bailout at General Motors and Chrysler.
administration is considering rolling back those rules. Even if fuel
efficiency gains plateau, though, gas prices are unlikely to rise
enough to affect purchase decisions, Gutierrez said, because so much
U.S. oil can now be extracted through fracking.
“If crude oil
starts to rise (in price), they can easily turn the spigot on,” he
said. “Barring some kind of catastrophe in the Middle East, crude
oil prices just can’t rise very much.”
low-income buyers are turning to crossovers too. If they can’t
afford a new one, they’re buying used, Gutierrez said.
won’t disappear overnight, they’re slowly fading. That presents the
auto industry with one of its biggest challenges for 2018, said
Jessica Caldwell, analyst at Edmunds.
a hard time trying to adjust production,” she said. “It’s a bit of a