Car sales continue to fall
Buyers want roomier rides in the form of SUVs.
Americans continued to flock to crossovers, SUVs and pickup trucks in August, but they’re abandoning passenger cars in droves.
Forecasters at Edmunds.com and Cox Automotive predicted overall sales increases of 1.2 percent and 0.8 percent, respectively.
The results showed that the auto industry remains relatively healthy as shoppers buy more profitable vehicles.
But it’s not all great news. For one thing, rising interest rates are scaring off some buyers. Zero-percent loans are drying up, and discounts are getting hard to find as automakers preserve profits.
“That means monthly payments for car buyers are going to get that much more difficult to meet,” said Charlie Chesbrough, senior economist for Cox Automotive. “The buying conditions are expected to deteriorate, which may cause consumers to get into the market today rather than wait.”
What’s more, passenger-car sales continue to plunge.
Passenger cars dropped below 30 percent of the market in August for the first month ever, according to Cox Automotive. A few years ago, they made up half of the industry.
Japanese automakers Toyota, Nissan and Honda each reported dismal car sales for August. For each of those automakers, car sales declined 15.6 percent, 16.2 percent and 15.3 percent, respectively.
“That tells you where the traditional car market is going,” Autotrader analyst Michelle Krebs said.
Ford already has announced plans to discontinue most of its passenger cars, including the Fiesta, Fusion, Focus and Taurus. Fiat Chrysler already axed most of its cars.
Nissan sales executive Billy Hayes said he doesn’t envision a “conceivable future” without sedans. The company is launching its redesigned Altima midsize car this fall.
“So we’re bullish on sedans and we’re sticking with it. The segments are still huge,” he said.
Huge, but rapidly shrinking. Overall, sales of mid-size and compact cars fell 15.6 percent and 13.6 percent to 130,000 and 160,000 vehicles, respectively, in August, according to Cox Automotive.
Ultimately, though, automakers don’t have much to cry about. Despite the car crisis, average vehicle prices continue to rise largely because customers are buying more expensive types of vehicles: crossovers, SUVs and pickups.
The average vehicle price for the month, before discounts, was $35,541, according to Cox Automotive. That was up 1.8 percent from a year earlier.
Such SUV brands as Fiat Chrysler’s Jeep are flourishing. And even the Japanese automakers are capitalizing.
SUVs including the Honda Pilot, Nissan Rogue and Toyota Highlander made up for much of the small-car declines.