Cruze sales down again in December

Special to the Salem News

The U.S. auto industry’s historic growth streak has ended, but demand for new vehicles — especially SUVs — remains healthy as the new year begins.

That means fewer car sales, including the Lordstown-built Chevy Cruze, which saw a 22.6 percent dip in December deliveries to 13,406 this December from 17,324 last December.

Overall, U.S. auto sales fell 2 percent to 17.2 million in 2017, according to Autodata Corp. It was their first year-over-year decline since 2009, ending an unprecedented seven-year expansion.

General Motors, Toyota and Ford all reported a 1 percent decline in sales last year compared to 2016. The Cruze saw a 2.2 percent decline in 2017 compared to year-over-year 2016 sales. Still, 184,751 Cruze deliveries were taken in 2017, second in Chevrolet car sales behind only the Malibu. The Silverado pickup truck remained the top-selling Chevy vehicle in 2017, at 585,864 — up 2 percent from 2016 sales.

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 fell short of 2016’s record of 17.55 million, 2017 was still the fourth-best sales year in U.S. history, after 2000, 2015 and 2016, according to Kelley Blue Book.

“It’s still a buoyant industry and the underlying factors that drive it are still very positive,” said Mark LaNeve, Ford Motor Co.’s U.S. sales chief.

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 also are becoming more durable so consumers can keep them longer, further putting 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 also 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.

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 Nissan Rogue SUV jumped 22 percent to more than 400,000. But 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.

No one was expecting U.S. auto sales to top December 2016, which was the best single month in 15 years. Sales dropped 5 percent to 1.6 million last month. Ford’s sales were up 1 percent in December as its new large SUVs hit the market, and Hyundai’s sales rose 2 percent. But most other automakers saw declines. Fiat Chrysler’s sales fell 11 percent , 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.

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