U.S. auto sales could hit a record fifth year in a row above 17 million in 2019 after all, based on better than expected results in November — although forecasts for 2020 continue to predict a continuing slight decline in the U.S. market.
Forecasts are also bearish for global auto sales in 2020. Question marks include the effect of the U.S.-China trade war, and whether China auto sales rebound after a significant slowdown, following years of go-go growth.
LMC Automotive said it expects China passenger-car sales to drop 10% in 2019, to about 22.3 million.
A showroom in Qingdao, in China’s eastern Shandong province.
AFP via Getty Images
Separately, The Economist Intelligence Unit called 2019 “fairly disastrous” for the global automotive sector in a recent analysis, with global new-vehicle sales down an estimated 6.2%. That’s largely thanks to trade tensions, higher costs, and also some internal factors in China, the world’s biggest new-vehicle market.
For example, auto sales in China dropped in part because China introduced some tougher emissions standards, and also cut incentives for producing more fuel-efficient vehicles, according to Ana Nicholls, director of industry operations at The Economist Intelligence Unit.
In addition, she said auto lenders have tightened consumer credit in China. “There has been such a boom in auto lending, but the early years were basically all from savings. They are quite rapidly switching to buying on credit, but credit boomed so much that now they have tightened up on that,” Nicholls said.
She said she expects auto sales to rebound in China in 2020 vs. 2019, but still remain below 2018.
Meanwhile, with just one month to go in 2019, U.S. auto sales still managed an upside surprise for the full year.
“November’s results will likely keep the industry on pace to sell 17 million units in 2019, slightly above our full-year forecast of 16.8 million,” said Charlie Chesbrough, senior economist for Cox Automotive.
Separately, IHS Markit affirmed a forecast of 17.1 million for 2019, citing good credit availability for most new-car buyers, plus year-end incentives, and plenty of inventory. U.S. new-vehicle sales were 17.3 million in 2018, up less than 1% from 2017.
U.S. auto sales hit a record of nearly 17.6 million in 2016 — beating 2015’s record by less than 1%. Before 2015, the last time U.S. auto sales beat 17 million was back in 2001, and that was largely because of huge incentive programs following the Sept. 11 attacks that year. The previous record was just one year before that, at 17.4 million in 2000.