partlycloudy
Wednesday January 17th, 2018 9:54AM

US auto sales likely dropped in 2017, but remain strong

By The Associated Press
Related Articles
  Contact Editor

DETROIT (AP) — The U.S. auto industry's historic growth streak may be ending, but demand for new vehicles — especially SUVs — remains healthy as the new year begins.

U.S. auto sales are expected to fall 2 percent to 17.1 million in 2017, according to Kelley Blue Book. That would be the first year-over-year decline since 2009, ending an unprecedented seven-year expansion.

General Motors, Toyota and Ford all reported a 1 percent declines in sales last year compared to 2016. Fiat Chrysler's sales fell 8 percent. Honda's sales were flat, while Nissan's rose 2 percent. Volkswagen brand sales rose 5 percent.

While sales are likely to fall short of 2016's record of 17.55 million, 2017 is still expected to be the fourth-best sales year in U.S. history.

Analysts think sales will fall a bit further this year. While low unemployment and rising consumer confidence are expected to boost demand, rising interest rates could make it more expensive for people to finance new vehicles.

"That's real money to consumers," said Charlie Chesbrough, a senior economist with Cox Automotive, which owns AutoTrader.com and other car-buying sites.

Vehicles are also becoming more durable so many consumers aren't buying new ones, which further puts a drag on sales. The average age of vehicles on the road has climbed to 11.6 years, up from 8.8 years in 1998.

The growing popularity of leasing will have a big impact on 2018 sales. Almost one-third of new vehicle sales were leases in 2015, and many of those 4 million lessees will be trading in their vehicles for new ones, according to the car buying site Edmunds.com. (Edmunds regularly provides content, including automotive tips and reviews, for distribution by The Associated Press.)

But leasing also has a downside for automakers, since the influx of late-model used cars returning to the market will cut into sales of new vehicles.

Tax cuts also could be a mixed blessing. They will likely stimulate demand, particularly for commercial trucks and vans. But the more the economy grows, the more likely it is that the government will raise interest rates, Chesbrough said.

Here are more details of December and 2017 sales:

—WINNERS AND LOSERS: Ford's F-Series pickup truck remained the best-selling vehicle in the U.S. in 2017, a title it has now held for 36 years. Ford sold 896,764 F-Series trucks in the U.S. last year, or nearly two trucks every minute, partly because of post-hurricane demand in Texas and Florida. Low gas prices and other factors had buyers ditching cars for SUVs at a fast clip; sales of the GMC Acadia SUV jumped 26 percent, while sales of the Nissan Rogue SUV jumped 22 percent to more than 400,000. Car-heavy brands like Chrysler, Dodge and Fiat all saw their sales drop by double-digit percentages. Toyota Prius hybrid sales plummeted 20.5 percent.

— LUXURY CROWN: Mercedes-Benz's sales fell 1 percent to 337,246, but that was still enough to make it the top-selling luxury brand in the U.S. for the second straight year. BMW eked out a second-place finish just ahead of Lexus. But some luxury brands struggled. Cadillac and Lexus both saw their sales drop 8 percent last year; Lincoln sales plummeted 17 percent in December. Mark LaNeve, Ford's U.S. sales chief, said mainstream brands are getting so luxurious that many buyers don't feel the need to step up to a luxury label.

— PILING ON THE DEALS: New vehicle prices hit a record last year, averaging $36,113 as buyers bought bigger SUVs and added more safety and infotainment features, Kelley Blue Book said. At the same time, automakers piled on deals in order to juice sales and hang on to their market share. Chevrolet was offering $11,000 off a 2017 Silverado pickup as part of an employee-pricing promotion in December. Automakers spent an average of $4,302 per vehicle in incentives last month, passing the previous record set in November, according to the consulting firm J.D. Power. Analysts expect a pullback in incentive spending this year as automakers cut inventory. But there will still be good deals, especially on slow-selling vehicles like midsize sedans.

— DECEMBER DIP: No one was expecting U.S. auto sales to top December 2016, which was the best single month in 15 years. Ford's sales were up 1 percent last month as its new large SUVs hit the market, but most automakers saw declines. Fiat Chrysler's sales fell 11 percent for the month, while Toyota's sales dropped 8 percent and Nissan's sales were down 9.5 percent. GM's sales fell 3 percent. Volkswagen's dropped 19 percent.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Economy
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
France's Macron vows to combat fake news on the internet
French President Emmanuel Macron is coming out strongly in support of press freedom and has announced a bill to combat the spread of fake news during election campaigns
3:25PM ( 8 minutes ago )
Los Angeles suspect in 911 hoax faces felony in Kansas death
A 25-year-old Los Angeles has waived extradition proceedings in California and will face a Kansas charge that he made a hoax emergency call that led to the fatal police shooting of a Wichita resident
3:23PM ( 11 minutes ago )
The Latest: Turkish banker's lawyer promises an appeal
A prosecutor calls the conviction of a Turkish banker in a conspiracy to help Iran evade U.S. sanctions a warning to foreign banks not to cheat on sanctions
3:14PM ( 19 minutes ago )
Associated Press (AP)
Fed officials expect economic boost from tax cuts
Fed minutes show officials hoping for economic boost from tax cuts, while split over pace of rate hikes in 2018
2:49PM ( 44 minutes ago )
The Latest: Hezbollah chief downplays Iran protests
The leader of Lebanon's Iranian-backed Hezbollah group says President Donald Trump's "hopes" that the protests in Iran will snowball and lead to regime change or chaos will be dashed along with the hopes of the Israelis and Saudis
2:20PM ( 1 hour ago )
APNewsBreak: Foreign fishermen settle human trafficking suit
Attorneys for two Indonesian fishermen say their human trafficking lawsuit against an American fishing boat owner has been settled
2:20PM ( 1 hour ago )
AP Business
Auto sales, believed to have dropped in 2017, remain strong
U.S. auto sales, believed to have dropped in 2017, remain close to record highs
12:10PM ( 3 hours ago )
Petrobras agrees to pay $2.95B to settle case in the US
Brazil's state-run oil giant Petrobras has agreed to pay $2.95 billion to settle lawsuits in the United States over the sprawling corruption scandal that engulfed dozens of officials and business executives across Latin America
11:38AM ( 3 hours ago )
Roku to chime in with voice-controlled assistant
Roku plans to add a voice-controlled digital assistant to its streaming TV players in an attempt to catch up with Google, Apple and Amazon
9:17AM ( 6 hours ago )
AP Business - Corporate News
Technology, energy help stocks sustain strong start to 2018
US stocks are rising further Wednesday as technology companies including Oracle and Nvidia keep climbing
1:34PM ( 2 hours ago )
The Latest: Iran TV says militants kill 3 security forces
Iranian state TV says three security forces have been killed during clashes with militants near the border with Iraq
1:21PM ( 2 hours ago )
The Latest: UN officials call on Iran to respect rights
U.N. officials are calling on Iran to respect protesters' rights and release any who have been arbitrarily arrested while demonstrating peacefully
12:55PM ( 2 hours ago )
AP Business - Economy
France's Macron vows to combat fake news on the internet
French President Emmanuel Macron is coming out strongly in support of press freedom and has announced a bill to combat the spread of fake news during election campaigns
3:25PM ( 8 minutes ago )
Los Angeles suspect in 911 hoax faces felony in Kansas death
A 25-year-old Los Angeles has waived extradition proceedings in California and will face a Kansas charge that he made a hoax emergency call that led to the fatal police shooting of a Wichita resident
3:23PM ( 11 minutes ago )
The Latest: Turkish banker's lawyer promises an appeal
A prosecutor calls the conviction of a Turkish banker in a conspiracy to help Iran evade U.S. sanctions a warning to foreign banks not to cheat on sanctions
3:14PM ( 19 minutes ago )
Trump threat to cut aid to Palestinians carries risks
With a Twitter post threatening to cut off U.S. aid to the Palestinians, President Donald Trump has expressed his frustration over the lack of progress in his hoped-for Mideast peace push
3:14PM ( 20 minutes ago )
Sony Pictures plans to release Slender Man movie
Sony Pictures plans to release a movie this spring featuring Slender Man, the horror character that inspired two Wisconsin girls to nearly kill their classmate
3:03PM ( 31 minutes ago )