Why optimism is up in the auto industry
It’s like a script from the classic Bill Murray movie “Groundhog Day.”
Yet again, truck and crossover vehicles sales buoyed automakers in January — even though overall industry sales are down from a year ago.
“Our pickup sales have grown every year for at least the last four years,” said Jim Cain, U.S. sales analyst for General Motors. “Sales for the industry as a whole look like they’re going to come in above expectations.
“You can never predict a full year based on January results, but we see very strong underlying demand. People are working, people are getting raises and people are getting tax cuts. That’s bringing them into the showroom for crossovers and trucks.”
GM isn’t alone. The numbers appear strong for Ford and Fiat Chrysler, too.
“Our all-new Expedition and Navigator are off to a hot start across the country,” said Mark Laneve, Ford vice president, U.S. marketing, sales and service.
And F-series sales of 58,937 vehicles in January represent the truck’s best start to a year since 2004.
Severe winter weather, though, including the so-called bomb cyclone that slammed the East Coast, likely hurt U.S. new-car sales in January.
When adjusting figures for the number of actual selling days in January compared with a year earlier, industry sales are down.
That’s not unexpected. Sales of new vehicles have cooled off as Americans are buying more lightly used vehicles that are coming off three-year leases. Other consumers are keeping their current vehicles longer because quality and durability have improved considerably.
Still, January’s selling rate, if it con- tinued throughout the year, would still be highly profitable for most companies. Also, automakers are selling high-margin SUVS and pickup trucks in droves.
“What people want is choice, which is why our three-truck pickup strategy is perfect for the market — midsize, half-ton and one-ton: Chevrolet Colorado, GMC Canyon, Chevrolet Silverado and GMC Sierra,” Cain said. “Having a broader portfolio lets you sell to the commercial buyer, small business owner, farmer and rancher, do-it-yourself suburban household and sports enthusiasts.”
While auto industry sales slipped compared with January 2017, companies reported strong sales of trucks and crossovers.
Honda and Toyota maintained their roles as dependable choices for cars as consumers gravitated to the new Honda Accord and Toyota Camry.
The average vehicle transaction price of $36,270 for light vehicles was down in January 2018 from December 2017, but up from a year ago.
GM saw an average transaction price jump of 4 percent from January 2017 with the help of GMC’S redesigned Terrain. And the redesigned Enclave carried Buick to a 5 percent higher transaction price.
Ram trucks and Jeeps pushed Fiat Chrysler to a 4 percent average price increase in January as sales of the Jeep Compass climbed.