(Reuters) – U.S. automakers on Friday reported another year of stable sales of pick-up trucks, as discounts during the crucial holiday season and lower interest rates on vehicle loans attracted buyers while demand for passenger cars retreated further.
FILE PHOTO: Newly assembled Ford 2018 F1-50 pick-up trucks are stored on a lot before being shipped to dealers during the 100 year celebration of the Ford River Rouge Complex in Dearborn, Michigan U.S. September 27, 2018. REUTERS/Rebecca Cook
Passenger cars have fallen out of favor with buyers amid lower oil prices and automakers have focused on selling larger sport utility vehicles (SUVs) and pick-ups that are also more profitable.
December is among the hottest months for auto sales in the United States as buyers take advantage of significant discounts provided by the car manufacturers to clear inventory.
Analysts expect overall 2019 U.S. sales to fall by about 1% from 2018, but still finish above 17 million vehicles for the fifth consecutive year.
But sales could dip below the 17-million mark this year, industry experts have warned, as the demand has peaked following the long bull-run since the 2008 financial crisis.
“Pent-up demand among consumers is drained,” said Haig Stoddard, senior industry analyst at forecasting and analytics firm Wards Intelligence, adding that he expects sales to dip further this year as economic growth also slows from 2019.
Auto consultants LMC Automotive and J.D. Power have forecast total light-vehicle demand to decline 1.4% to 16.8 million units in 2020.
“Manufacturers will face a lot of pressure to stand out in a crowded market with nearly 60% more redesigned or new entries in 2020 than there were in 2019,” Jeff Schuster, LMC Automotive global vehicle forecasts president, wrote last week.
Overall incentive spending by automakers as a percentage of vehicle retail prices remains close to 11%, the highest level since the 2008 recession, according to the auto consultants.
General Motors Co, which was hit by a month-long strike by its 48,000 hourly employees, reported a 6.3% fall in sales for the fourth quarter at 735,909 vehicles.
“Our fourth-quarter stocks were leaner than we wanted, but as we get ready to launch our all-new full-size SUVs, we look forward to another solid year in 2020,” said Kurt McNeil, vice president, GM U.S. sales operations.
GM’s total U.S. sales fell 2.35% to about 2.9 million vehicles last year, with volumes of its Trax compact SUVs surging about 30% to 116,816 units. Sales of its Cruze cars slumped 66%.
Toyota Motor Corp reported a 5% drop in U.S. passenger car sales last year, compared with a 0.8% dip in sales of its trucks and SUVs. Total sales declined 1.8% to 2.4 million vehicles.
Sales of Fiat Chrysler Automobiles NV dipped 1% to 2.2 million vehicles in 2019. The Jeep maker reported an 18% jump in Ram pick-up truck numbers.
“We have read the expectations that sales may slow a bit in 2020,” said Reid Bigland, head of U.S. sales at Fiat Chrysler.
Silicon Valley carmaker Tesla Inc delivered about 367,500 vehicles during 2019, just meeting the low end of its target to deliver 360,000 to 400,000 vehicles.
Nissan Motor Co’s 2019 U.S. sales plunged by 10% to a six-year low of 1.3 million vehicles. The automaker remains embroiled in a crisis after former boss Carlos Ghosn was arrested in Japan in 2018 for financial misconduct – a charge he denies. He fled to Lebanon early this week after escaping from Japan.
Ford Motor Co is scheduled to report quarterly sales on Monday.
Reporting by Ankit Ajmera, Sanjana Shivdas and Dominic Roshan in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila