As US light vehicles sales topped 17 million in 2019 for the 5th consecutive year, Chris Hopson takes a look at the… https://t.co/YWcwD6o06a
US light-vehicle sales decline in Q1 2019
Light-vehicle sales in the United States decreased 2.7% year on year (y/y) to 1,608,662 units in March and decreased 2.5% y/y to 4,006,667 units in the first quarter. However, the seasonally adjusted annual rate (SAAR) of US light-vehicle sales was 17.3-17.4 million units in the first quarter, the strongest result so far this year, with the previous two months having an average SAAR of 16.6 million units. Please note that all industry-level figures in this article are estimates.
Outlook and implications
Although vehicle affordability concerns such as rising interest rates, moderating OEM incentive levels, and growing average transaction prices remain headwinds, US light-vehicle sales in March bounced back from the slower pace of demand realised through the first two months of 2019, according to IHS Markit light-vehicle analyst Chris Hopson. On a seasonally adjusted annual rate (SAAR) basis, US light-vehicle sales sprang forward to an estimated 17.3-17.4 million units in March, a stronger rate than the 16.6 million-unit SAAR average of the previous two months. The surging sales in March helped boost the first-quarter SAAR to an average of 16.85 million units, and we expect a slightly lower sales pace in the second quarter. Light truck sales continue to drive the market and IHS Markit maintains a light-vehicle sales projection of 16.8 million units in 2019.
Headwinds from an incoming flow of used vehicles, vehicle affordability issues stemming from rising interest rates and rising average transaction prices, and a continued expectation of a slowdown in passenger car sales result in expectations that overall light-vehicle demand will decline in 2019, but remain at a relatively solid level for the industry.
There were 27 selling days in March this year, one fewer than the year-ago month. On a unit volume level, an estimated 1.61 million light vehicles were sold in March, a decline of over 2% y/y. This results in a first-quarter sales volume of 4.03 million units, down an estimated 90,000 units from last year's corresponding period.
Given one fewer selling day, year-on-year sales volume comparisons for most automakers were down in March, although there were a few notable exceptions.
Continuing the ongoing market shift and weather-induced preference for all-wheel-drive and four-wheel-drive utility vehicles, light truck sales continue to outpace sales of passenger cars in the US. In March, US light truck sales were up approximately 1%, while passenger car sales were down more than 8%. Through the first three months of 2019, passenger car sales were down by approximately 105,000 units, while light truck sales were essentially even with the year-earlier levels, being up 15,000 units.
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