The GM Lordstown Plant in Ohio: GM said in November it would end production at five North American plants including Lordstown, and cut 15 percent of its salaried workforce
Chicago (AFP) - Auto makers announced their end-of-year US sales totals Thursday, showing a slowing market even as Americans’ demand for more expensive SUVs and trucks drove up prices.
US consumers continued the trend away from small cars and sedans, but appeared increasingly squeezed by higher interest rates and price tags.
With low unemployment levels and a strong economy, America’s big three auto makers reported a mixed picture.
GM and Ford notched declines. Fiat Chrysler’s US subsidiary soared.
GM, the biggest of the US auto makers, reported a 2.7 percent sales dip in the fourth quarter and a 1.6 percent decline for 2018 – despite selling more crossover SUVs than in 2017.
Ford also struggled. Sales were down 8.8 percent in December to end the year 3.5 percent lower than 2017. It, too, sold more of its larger vehicles, including F-Series pickups and SUVs.
FCA US, Fiat Chrysler’s US subsidiary, improved its annual total by nine percent – fruits of its new focus on larger vehicles. The company’s sales rose 14 percent in the final month of the year.
“This year’s performance underscores the efforts we undertook to realign our production to give US consumers more Jeep vehicles and Ram pickup trucks,” FCA US’s sales chief Reid Bigland said in a statement.
Another industry giant, Toyota, also recorded US sales slumps in December and the year – 0.9 percent and 0.3 percent, respectively.
- Further slowing in 2019 -
The figures came in near analyst expectations, who predicted a healthy economy and massive tax cuts would lead to another year of robust, if slowing, sales.
“We are forecasting sales to slow further in 2019. For some auto makers, the slowdown has already begun,” Cox Automotive Senior Economist Charlie Chesbrough said in a statement.
Car makers were expected to face further challenges in 2019. The effects of the tax cuts, especially for businesses buying fleets of cars, were expected to wane.
Millions of recently leased cars also were to come back to dealerships and compete with new cars for consumer dollars.
Those challenges were coinciding with rising prices for new vehicles.
Kelley Blue Book predicted the average new-car price was up about three percent in 2018 to an average of more than $36,000.
“Despite retail sales falling for the sixth consecutive month, the continued growth in transaction prices is allowing manufacturers to offset lower sales with higher revenue,” JD Power analyst Thomas King said in a statement.
- More trucks and SUVs -
That combination led GM to announce it would double down on large vehicles with higher price tags in 2019.
“We feel confident heading into 2019 because we have more major truck and crossover launches coming during the year and the US economy is strong,” GM sales chief Kurt McNeil said in a statement.
But Edmunds predicted consumers will feel more squeezed in 2019 as auto prices rise and interest rates are set to climb further.
The analytics firm said the industry would sell fewer cars – down from a forecast 17.2 million in 2018 to 16.9 million in 2019.
Among other auto makers, Honda boosted its December sales by 3.9 percent but declined 2.2 percent for the year. Truck and SUV sales nudged up for the year, but car sales plummeted.
Nissan similarly rose 7.6 percent in December but fell 6.2 percent in 2018. Its car sales fell 17 percent while truck-SUV sales gained 2.5 percent.
Mazda fared the opposite: declining 3.8 percent for December, but up 3.7 percent for the year. The brand was buoyed by unusually high gains in SUV sales.
Tesla delivered 90,700 cars in the fourth quarter, slightly below the 91,000 expected by analysts.
It also delivered 245,240 for all of 2018, more than twice the number from the previous year as it worked out shipping and delivery problems for its newly-debuted mid-priced Model 3 sedan.
Elon Musk’s electric car brand was also cutting its prices by $2,000 to compensate for a drop in the federal electric car tax credit that took effect on January 1.