Car sales end 7-year expansion, but remain strong
Annual auto sales for 2017 are expected be down for the first time in the U.S. since 2009, ending an unprecedented seven-year expansion that began the year after General Motors and Chrysler declared bankruptcy. But even with sales forecast to be down 2 percent for the year at 17.1 million vehicles, that would still make it the fourth-best year in history.
The Detroit Three all saw year-end U.S. sales numbers drop in 2017 from the previous year. As carmakers report sales numbers throughout the day Wednesday, most are expected to be down from 2016.
Ford Motor Co. reported Wednesday that sales fell 1.1 percent for the year. General Motors Co. sales slipped 1.3 percent. And Fiat Chrysler Automobiles NV reported an 8 percent drop compared to a year prior.
GM sold 3 million vehicles in 2017. That included 2.1 million Chevrolets. The company reported it sold more than 1.3 million trucks and 965,090 crossover vehicles last year. GM’s December sales slipped 3.3 percent compared to the same month a year ago.
Meanwhile, Ford moved 2.59 million vehicles in 2017, which included a 4.3 percent increase in sales for trucks and a 4.3 sales increase compared to 2016 for SUVs as well.
Ford car sales fell 15.2 percent for the year. That includes ending the year with a 21 percent decline in Fusion sales — though it was still the automaker’s top-selling car — as Ford reconsiders the future the midsize sedan. Total sales jumped 0.9 percent in December compared to the same month a year ago.
Fiat Chrysler sold 2.1 million vehicles in 2017. Its Ram brand had the only sales increase for the year at 2 percent. The Alfa Romeo brand saw a big leap in sales due to new vehicle launches in the U.S.
The initial monthly numbers are roughly equal to what industry analysts expected for the month.
Toyota Motor North America reported that sales fell 0.6 percent in 2017, selling 2.4 million vehicles last year. The Japanese automaker saw an 8.3 percent decrease in December deliveries. The Toyota division fell 7.2 percent last month, but ended the year up 0.5 percent overall. Lexus sales fell nearly 14 percent in December, ending the year down nearly 8 percent overall.
Industry-wide, the group expected sales to slip 7 percent in December compared to the same month a year ago, and a 2 percent drop for the year.
“December should be the biggest sales month of the year,” Tim Fleming, analyst for Kelley Blue Book, said in a statement released before automakers reported the sales figures. “It’s also important to remember that December 2016 was the strongest month in nearly 15 years, fueled by heavy incentives and year-end sales objectives.
“We’re still expecting a year-end sales push from many manufacturers, which will translate into incentives and discounting, but since the sales objectives should be reduced from last year’s peak, we are projecting slower sales than last December.”
Industry analysis companies J.D. Power and LMC Automotive anticipated a 2.6 percent decline for the month of December, but expected retail sales to come in below 14 million units for the entire year. Total sales, which would include fleet vehicles, are expected to fall 1.9 percent compared to 2016, when automakers sold the most vehicles in U.S. history.
LMC Automotive expects total vehicle sales to sit just under the 17 million mark in 2018.
Meanwhile, GM’s Chief Economist Mustafa Mohatarem expects 2018 sales to be over 17 million for the fourth consecutive year.
“This year, many consumers will see their take-home pay rise because of tax reform,” he said in a statement. “That will keep the broad economy growing, and help keep sales at very healthy levels even as the Fed increases interest rates.”