U.S. Car Sales Drop, Industry Expects 11% Decline

July 11, 2019

Car sales in the U.S. have been gradually declining in the last six months. Since the start of 2019, the industry has seen a 2.4% drop and is expected to finish at 16.9 million by the end of the year.

This is the first time since 2014 that the U.S. auto industry will be below 17 million. Despite the decline, the industry’s numbers are still strong. There are approximately 500,000 reefer trailers on U.S. roads and 100,000 armored vehicles on the road worldwide.

Analysts say the low demand for cars is largely due to rising auto loan rates and not because of a lack of interest in vehicles.

“The U.S. economy continues to grow at a healthy pace,” said Elaine Buckberg, the chief economist of General Motors in a statement. “Jobs are plentiful and inflation remains low.”

“Auto demand was better than anticipated in the first half and we expect strong performance in the second half of the year,” Buckberg said. “If the [Federal Reserve] cuts rates, as widely expected, lower financing costs will provide further support to auto sales.”

Among the vehicles that have been losing steam in auto sales is the compact crossover. Compact crossovers, which have been one of the most popular vehicles in the last few years, have declined in sales by 4% as of June. The Jeep Compass, Ford Escape, and Nissan Rogue have been hit the most by this decline.

However, the declining interest in the compact crossover doesn’t mean Americans are interested in smaller vehicles. In fact, the decline could mean the opposite.

Full-size pickup truck sales have increased by 1.5% in the first half of 2019. The Jeep Gladiator and Ford Ranger gained 15% of the sale shares.

Despite these gains, Ram is taking the lead with its two-truck strategy. In 2017, there were 237 existing car models offered by the U.S. auto market. And Ram is taking advantage of these existing models by selling its previous generation of trucks to customers on a budget while also selling its latest, higher-priced trucks.

With its two-truck strategy, Ram is expected to finish ahead of Chevrolet Silverado by the end of the year. Ram has already doubled its lead against Silverado with over 44,000 this past June. The Ford F series is currently selling in first place.

“We are well on our way to selling a million pickup trucks in the United States in 2019,” said Mark LaNeve, Ford’s vice president for U.S. marketing, sales, and service. “We haven’t eclipsed a million since 2005.”

But Ram isn’t the only company that’s been seeing a surprising amount of success this year. Subaru has also been stretching its margins with small gains for the last 91 months as of June. The auto company is expected to become the automotive industry’s largest brand still growing in the U.S. with a market share of 5.2% thus far this year.

Subcompact and mini-care segments, specifically Chevy Spark, Ford Fiesta, and Kia Soul, have also jumped in popularity. However, car sales are still expected to fall nationally by 11% in the next six months and sales are expected to drop worldwide by over 4 million by the end of this year.

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