DETROIT—The U.S. auto industry’s historic growth streak may be ending, but demand for new cars and trucks remains healthy as the new year begins.
U.S. sales of new vehicles are expected to fall 2 per cent 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 per cent declines in sales last year compared to 2016. Fiat Chrysler said its sales fell 8 per cent. Automakers are releasing monthly and annual sales numbers Wednesday.
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. Low unemployment and rising consumer confidence are expected to boost demand this year. Tax cuts also could stimulate demand, particularly for commercial trucks and vans, Ford says.
The growing popularity of leasing also will bring more consumers back to the market this year. 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.
But leasing also has a downside for automakers, since the influx of late-model used cars coming back on the market will cut into sales of new vehicles.
Here are more details of December and 2017 sales:
WINNERS AND LOSERS:
Ford’s F-Series pickup truck remained the bestselling 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. F-Series sales rose 9 per cent for the year, in part because of post-hurricane demand in Texas and Florida. Car-heavy brands had the toughest time winning customers, who were flocking to SUVs. Chrysler, Dodge and Fiat all saw their sales drop by double-digit percentages. Toyota Prius hybrid sales plummeted 20.5 per cent.
Mercedes-Benz dethroned BMW as the bestselling luxury brand in the U.S. in 2016, and it’s likely to hold on to that title in 2017. Through November, Mercedes had sold 332,990 vehicles; BMW was far behind, battling it out with Lexus for second place. Hyundai Motor Co.’s luxury Genesis brand was one of the biggest climbers in that market, with sales more than tripling over the previous year.
As demand slows, automakers are trying to juice sales—and hold on to market share—with incentives. Last month, Chevrolet was offering up to $11,000 off on a 2017 Silverado pickup, while Toyota was offering zero-per cent financing for 60 months and $500 cash on a 2018 Camry. Automakers spent an average of $4,302 per vehicle in incentives last month, passing the previous record set in November and $300 higher than last December, according to the consulting firm J.D. Power.