Chicago Automobile Trade Association

Annual retail sales fall for second consecutive year but consumer expenditure reaches highest level ever

December 28, 2018
New-vehicle retail sales in December are expected to fall from a year ago, according to a forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,310,700 units, a 1 percent decrease compared with December 2017.
 
"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," said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. "Consumers are on pace to spend nearly $45 billion on autos in December, up 1 percent from last year and the highest level ever recorded."
 
The average transaction price in December is on pace to reach $34,292, another industry record. This reflects growth in prices for cars (up $591 to $27,754) and trucks/SUVs (up $173 to $36,548). 
 
Incentive discipline has continued into December, as spending is expected to decline year over year for the sixth consecutive month. December to-date spending is $4,098 per unit, down $164 from the same time last year. Spending on cars is down $663, while spending on trucks/SUVs is up $42.
 
Retail sales for the calendar year are expected to reach 13.9 million, a decline of 1.3 percent from last year.
 
"While 2018 marks the second consecutive year of sales declines, strong revenue and lower spending are helping to maintain profitability," King said. "Looking ahead to 2019, a record number of truck and SUV launches will help manufacturers better align portfolios with overall demand." 
 
Nearly 45 all-new or major re-designed vehicles are expected to launch next year, with 28 being a truck or SUV.
 
Jeff Schuster at LMC Automotive, said: "The combination of strong fleet volume and stable retail demand is expected to push 2018 U.S. light vehicle sales up to 17.3 million units. Next year, the auto industry will continue to face heightened uncertainty and intense competitive challenges due to conflicting macro factors, the continuing SUV/car shift and the growing number of new electric vehicles joining the market."
 
LMC’s forecast for 2018 total light-vehicle sales is up slightly to 17.3 million units on a robust November performance and solid projection in December. The forecast is expected to exceed 2017 by 60,000 units. 
 
The retail light-vehicle forecast now also rounds up to 13.9 million units, but still represents a decline of 1 percent from 2017. The fleet volume forecast remains 5 percent higher than 2017 and represents 20 percent of total light-vehicle sales. 
 
For 2019, the forecast for total light-vehicles is expected to finish between 16.9 million to 17.0 million units, a decline of 1.5 percent from 2018. Retail light-vehicle sales is projected at 13.6 million to 13.7 million units, a decline of 1.7 percent from 2018.
 
 

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