Auto Industry's Growth Streak Ends at 7 Years
GM's December sales fell year over year, while volume rose at Ford.
Automakers closed out 2017 U.S. auto sales with December numbers reported Jan. 3. December light-vehicle sales declined by 5% year over year, but we calculate a 1.3% decline adjusting for one less selling day than December 2016.
Crossovers continue to do well at the expense of sedans, and we expect that trend to continue in 2018. Premium brands such as Lexus, Cadillac, and Lincoln all had a weak month. Ford believes consumers are valuing function over brand cachet and buying expensive SUV models such as Explorer at premium prices.
For the full year 2017, sales came in at about 17.25 million, which was the third straight year at over 17 million and the fifth time ever. The 1.8% year-over-year decline was the industry’s first annual decline since 2009. We expect 2018 sales to again decline but not severely. We continue to believe that leasing is done growing its penetration at about 30% of new vehicle sales and a continued rise in off-lease supply will in our view draw some consumers back into the used vehicle market.
Ford’s SUVs had a record year, selling just under 800,000 vehicles and a record December. Explorer’s sales rose 33% for the month for its best December since 2003 and best full year since 2005. Although Lincoln struggled with the rest of the premium market, with its December sales down 17%, the one bright spot was the new Navigator, which rose 30%.
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