ReutersJan 04, 2020 13:10:58 IST
US automakers on Friday reported another year of stable sales of pick-up trucks, as discounts during the crucial holiday season and lower interest rates on vehicle loans attracted buyers while demand for passenger cars retreated further.
Passenger cars have fallen out of favour with buyers amid lower oil prices and automakers have focused on selling larger sport utility vehicles (SUVs) and pick-ups that are also more profitable.
December is among the hottest months for auto sales in the United States as buyers take advantage of significant discounts provided by the car manufacturers to clear inventory.
Analysts expect overall 2019 U.S. sales to fall by about 1 percent from 2018 but still finish above 17 million vehicles for the fifth consecutive year.
But sales could dip below the 17-million mark this year, industry experts have warned, as the demand has peaked following the long bull-run since the 2008 financial crisis.
"Pent-up demand among consumers is drained," said Haig Stoddard, a senior industry analyst at forecasting and analytics firm Wards Intelligence, adding that he expects sales to dip further this year as economic growth also slows from 2019.
Auto consultants LMC Automotive and J.D. Power have forecast total light-vehicle demand to decline 1.4 percent to 16.8 million units in 2020.
"Manufacturers will face a lot of pressure to stand out in a crowded market with nearly 60 percent more redesigned or new entries in 2020 than there were in 2019," Jeff Schuster, LMC Automotive global vehicle forecasts president, wrote last week.
Overall incentive spending by automakers as a percentage of vehicle retail prices remains close to 11 percent, the highest level since the 2008 recession, according to the auto consultants.
General Motors Co, which was hit by a month-long strike by its 48,000 hourly employees, reported a 6.3 percent fall in sales for the fourth quarter at 735,909 vehicles.
"Our fourth-quarter stocks were leaner than we wanted, but as we get ready to launch our all-new full-size SUVs, we look forward to another solid year in 2020," said Kurt McNeil, vice president, GM U.S. sales operations.
GM's total U.S. sales fell 2.35 percent to about 2.9 million vehicles last year, with volumes of its Trax compact SUVs surging about 30 percent to 116,816 units. Sales of its Cruze cars slumped 66 percent.
Toyota Motor Corp reported a 5 percent drop in U.S. passenger car sales last year, compared with a 0.8 percent dip in sales of its trucks and SUVs. Total sales declined by 1.8 percent to 2.4 million vehicles.
Sales of Fiat Chrysler Automobiles NV dipped 1 percent to 2.2 million vehicles in 2019. The Jeep maker reported an 18 percent jump in Ram pick-up truck numbers.
"We have read the expectations that sales may slow a bit in 2020," said Reid Bigland, head of U.S. sales at Fiat Chrysler.
Silicon Valley carmaker Tesla Inc delivered about 367,500 vehicles during 2019, just meeting the low end of its target to deliver 360,000 to 400,000 vehicles.
Ford Motor Co is scheduled to report quarterly sales on Monday.
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