6/26/2019

U.S. Car Market Slowdown Builds Momentum

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U.S. new-car sales, which totaled 17.3 million units last year, will slide to 6.8 million this year and 16.5 million in 2020, Cox Automotive Inc. forecasts.

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U.S. new-car sales, which totaled 17.3 million units in 2018, will slide to 6.8 million this year and 16.5 million in 2020, Cox Automotive Inc. forecasts.

The Atlanta-base firm estimates that June sales declined 3% year-on-year to 1.5 million units. One less selling day will leave the annualized rate unchanged at 17.1 million vehicles year-on-year.

Demand through the first half of 2019 fell an estimated 2% to 8.4 million units. Cox says the drop will accelerate to 3% in the second half because of higher vehicle prices, tighter credit, slipping consumer sentiment and consumer budget constraints.

The average selling price of a new passenger vehicle has climbed from nearly $32,000 in 2014 to $37,000 this year, according to Cox. For now, higher per-unit market pricing is helping carmakers offset the impact of lower volumes.

Fleet sales represent a bright spot in the market. Cox says the continuing effects of last year’s tax reforms will boost fleet demand 7% in 2019 as the retail side drops 5%.