By on January 5, 2018

2018 Toyota Camry Georgetown Kentucky assembly plant - Image: Toyota

While it’s definitely not the same doom and gloom vibe felt around the domestic auto industry as it was financially circling the drain in 2008, headlines in the new year seem to forecast storm clouds on the horizon.

After nearly a decade of sales growth, the American market for passenger cars and light trucks flattened out in 2017. Actually, sales didn’t just flatten in the U.S., they dropped 1.75 percent for the year. Not only has the overall U.S. market shrunk, we’re seeing predictions of the death of an entire segment of that market, the sedan — a segment that has pretty much defined the American automotive world for a century. It’s one thing for an iconoclastic website like TTAC to be talking about a sedan deathwatch, but when that prediction is on the front page of the Detroit News, with reports that Ford may very well stop building sedans in America and that Buick sedan sales have been cut in half over the past year, people will take notice.

I’m not here to depress you, though. Despite the gloomy cast to things, in reality the automotive industry as a whole is doing very well. That 1.75 percent drop in U.S. sales? Well, it was a drop to 17.245 million new vehicles and, by any historical measure, a 17 million-unit year is a very good year. The U.S. car market is still the most profitable in the world. Domestic and foreign automakers are profitable and making billions of dollars here.

Also, while the U.S. market has plateaued, growth in the rest of the world has propelled global new car and light truck sales beyond the 90 million-unit mark for the first time in history. Based on data provided by Wards, the Wall Street Journal reports that global light vehicle sales went up 2.7 percent in 2017, exceeding population growth. More and more of the world’s people have access to automotive vehicles. There are now more than 1.33 billion cars and light trucks in use in the world, about one for every five people on the planet.

Part of that story is, of course, in China, now the biggest automotive market in the world. More than a quarter of the new cars and light trucks sold in 2017 were sold in the former Middle Kingdom. China is now home to some of the fastest-growing automakers in the world. In 2016, for example, privately held Geely saw its sales grow by double digits, 28 percent, and state-linked SAIC, one of GM’s partners in China, saw its sales grow that year by triple digits, 115 percent. Dave Zoia of Wards attributes the expansion of the Chinese market to sales growth in second- and third-tier cities, as the markets in cities like Shanghai and Beijing mature.

China isn’t the entire story, though. Three other important markets, one established, the other two relatively new, saw growth in 2017. After years of stagnation and the Euro debt crisis, it looks like the European car market has finally recovered and is started to grow again. Two newer markets, Russia and Latin America, which had formerly been seen as having potential for great growth but then went through their own challenges, are also growing again. The Journal attributes that renewed strength to income growth in emerging markets, resulting in a growing number of first-time buyers for both new and used cars.

This is not to say there aren’t challenges facing the auto industry. Massive investments will be needed to develop electric and autonomous vehicles, and the industry as a whole has to address cultural shifts away from privately owned vehicles and towards ride sharing and “mobility.” That being said, as we enter 2018, the industry as a whole looks to be healthy and growing.

[Images: Toyota, OICA (graph includes commercial vehicle sales)]

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40 Comments on “Depressed About Flat U.S. Car Sales and the Death of the Sedan? Will 90 Million Units Globally Cheer You Up?...”


  • avatar
    Lou_BC

    Vehicle sales are obviously tied to living standards. If your disposable income grows, you can afford luxury items like vehicles.

  • avatar
    pmirp1

    17 millions sales a year is a huge year. Even with vehicle prices as high as they are, these are numbers that are powering the economy. All three domestics are profitable. Trump is powering the economy.

    Europe is behind America in growth, so their car sales are just picking up. China will be the largest economy in the world in next 15 years, so they will have the most sales.

    As for sedans, I say good riddance. I hope every vehicle in America except for coupes are trucks and SUVs. Once you experience the comfort and convenience and utility of a SUV, one should never ever go back to a lowly (literally and figuratively) cheap sedan.

    • 0 avatar
      Tennessee_Speed

      Not so fast. My next auto will be a sedan (Genesis G70) or a VW GTI. I like the handling of a good sports sedan & the active safety that a SUV lacks. Try looking at youtube videos when SUVs get hit on the highways; they tend to roll over quite easily compared to a sedan that has a much lower center of gravity. My friends often tell me there’s nothing like sitting up high in an SUV. SUVs cost more than sedans, weigh 15% more, and get worse gas mileage.

    • 0 avatar
      sportyaccordy

      What does Trump have to do with anything? If anything he is to blame as the market is down from last year, and set to continue to decline. Don’t do that, desperation is never a good look.

      • 0 avatar
        Big Al from Oz

        sportyaccordy,
        I agree.

        The current US economic growth has taken since the GFC to be where it is.

        Trump’s effect is there, but it’s miniscule. Even GW deserves more credit than Trump for how things are now.

      • 0 avatar
        pmirp1

        Sportyaccordy, over 17M cars were sold. In an environment where trucks and SUVs rule. That means they cost much more than your not so sporty Accord. Add to that stock market record race to 25,000 and if you don’t think it’s Trump and his deregulation and promise of tax cuts (since delivered) it’s because you are watching too much MSNBC and not enough business channels or Wall Street journal.

    • 0 avatar
      Big Al from Oz

      pmirp1,
      Its good to see those dollars in the US market. But now would be a good time invest in the market other than vehicle design.

      Invest in restructuring and producing a more competitive market. Start winding back government assistance and protection. This will improve the US auto industry with productivity improvements to help with its longer term viability.

      • 0 avatar
        pmirp1

        Big Al from Oz, unemployment is 4.1%, black unemployment is at its lowest, expensive SUVs and trucks are taking larger proportion of sales. A lot has to do with stock market racing to 25000. If your 401k has gone up 20-30% in one year you feel better. Add to that general deregulation of business and promise of tax cuts and US economy is doing fantastic. Better stuff to come. Today stock market was up a lot (Dow over 200 points). Trust me on this, even people who were hesitant are now jumping in to buy. It’s not too late. Stock market will hit 30000 by early 2019, count on it. And it’s all Trump.

        • 0 avatar
          Tele Vision

          A ‘Trumpeter’, I see. That dotard has had less to do with the economy than nearly anyone else in the country. His four bankruptcies should be telling. An LSE professor, I think, discovered that, had Trump invested his Dad’s money in the S&P 500 and taken up a career in finger-painting, he’d be worth a provable $8B. Instead Trump lawyer-ganged contractors into poverty; hosed money away on idiotic projects; and isn’t worth half of what he says he is – which is approaching half of the finger-painting career amount. This guy is your muse? Your hero?

          • 0 avatar
            ToddAtlasF1

            What was your prediction for the economy should Trump be elected? How about your hero the professor? Don’t let reality ruin your ideology.

          • 0 avatar
            highdesertcat

            What matters is how well the policies of the guy in the White House are working.

            All the Trump haters must want to go back to the dark ages of the last administration.

            I didn’t vote for Trump, but I sure like what he has done for me and mine so far.

            And I can certainly understand why the looney lefty libbies are blowing their minds because of all the changes that have turned their world upside down.

            Elections have consequences, and there will be more changes made in 2018. Count on it!

    • 0 avatar
      bd2

      Drumpf hasn’t been in office long enough to have any real impact on the economy and besides, the actions of Congress has a much more significant impact and whatever policies a President sets forth usually doesn’t have an impact until the following term.

      GHW Bush ended up being a one term President b/c he got hit with the blame for the recession following the S&L crisis (which arose from Reagan-era policies).

      • 0 avatar
        TomHend

        Are you familiar with the Clinton Foundation?

        Starting to look like regime change is coming to Iran without firing a shot, Trump had nothing to do with that too- nevermind lets get a war going and send more Americans over to the Middle East to die.

        Who here mocked me when I said Obama turned the drug trade over to ISIS from the South Americans?

        http://www.newsweek.com/hezbollah-cocaine-smuggle-united-states-obama-751928

        Don’t worry only 7 more years to go.

  • avatar
    stingray65

    Don’t all these 90 million car buyers know about the impending doom of global warming? Don’t they know that building and operating all these new cars is depleting the natural resources of the planet? Don’t they know that their purchase of all these new cars will create and support millions of good paying jobs, which will provide added income that will be spent on even more cars and other resource depleting consumption such as new homes with electric heat and air-conditioning, big-screen TVs, out-of-season fruit and vegetables, air-freighted fresh seafood, and jet powered vacations? Don’t they care about future generations and polar bears? Why can’t they ride a bicycle or walk instead, maybe take a bus or train for long trips, or just stay home and collect a welfare check? This has to stop or we will all be doomed.

    • 0 avatar
      I_like_stuff

      They all need to buy electric cars. Since electricity comes from the wall, there is no pollution.

    • 0 avatar
      30-mile fetch

      If people lived a lot longer than 80 years, they actually may want to ponder some of those questions. As it is now, we treat our mere handful of decades as a smash-and-grab toward material fulfillment and leave the consequences to future generations and distant geographies. Like any other organism, really. Or pathogen.

      • 0 avatar
        stingray65

        In 1798 noted priest and scholar Thomas Malthus predicted we would all be dead from starvation due to overpopulation, and 220 years later we are still here and fatter than ever.

        In 1863 noted economist William Jevon predicted we would all be dead because we would run out of coal, and 155 years later we are still here building new coal plants while environmentalists curse that we still haven’t run out of the stuff.

        In 1919 an expert panel of petroleum industry experts predicted peak oil within 2 to 5 years and rapid decline to exhaustion thereafter, and 99 years later we have greater known oil reserves than at any point in history and the environmentalists curse that we still haven’t run out of the stuff.

        Human worry about such questions during their limited time on the planet has so far proven to be a waste of time. Free markets react and adjust very efficiently, if something gets scarce man has proven very innovative in finding new sources of supply, or ways to use existing sources more efficiently, or finding substitutes. As noted economist Herbert Stein said: “If something can’t go on forever, it will stop.”

        • 0 avatar
          30-mile fetch

          “If something can’t go on forever, it will stop.”–That actually may be far more ominous that you probably intended.

          That your first reaction is to cite only century-old ways in which humans haven’t run out of stuff suggests to me you aren’t considering a very broad scope. If we could still live for 900 years like Noah, we might wonder what nine centuries of rapacious resource consumption, waste generation, and biodiversity loss would do to our own quality of life.

          But I’ll be checking out *long* before then, the Pacific Ocean garbage patch isn’t washing up in my backyard and cancer won’t be cured in my lifetime whether we log out the rainforests or not, so yes I am going to buy the 4Runner that gets 18mpg combined because I want the experiences that it affords me while I’m still here.

    • 0 avatar
      Lou_BC

      @stingray65 – human beings are extremely myopic. History clearly bears that fact out to be true but one would have to be the exception to that rule to be aware of that.

      @I_like_stuff – it has been proven that even electricity generated by “non-renewables” used to charge EV’s is cleaner than running ICE vehicles.

      One has to view it from the perspective of harm reduction first then work on harm prevention.

      • 0 avatar
        conundrum

        Proven by who, exactly? Having been employed by a utility using “non-renewables”, the problem was always how to properly clean stack emissions. They were nowhere near as clean as an ICE engine with modern catalysts, despite hundreds of millions on stack precipitators and every gizmo known to man. Ask the people living in the vicinity with regard to large flakes of soot when the system “regenerated” like a VW diesel how they feel.

        Then there’s the problem of efficiency, typically 35 to 40% per plant BEFORE transmitting and distributing the electricity. Count on 8 to 10% losses. then there’s the 90% if you’re lucky from “wall” through AC to DC converter to fill battery which heats up and wastes energy the closer it gets to full.

        Then there’s the “popular” view that AC electricity has current running like a DC circuit. It’s more like a two-person crosscut saw, pushing and pulling 60 times a second. and if it’s connected to any other system’s grid, Hydro power is just part of the push pull. Your average dolt thinks that if they live next to a dam, their electricity is emission free. I blame lax educational standards. And now every shelf-stocker at a supermarket regards themselves as an engineer on internet forums and tells me how I’m wrong. Right. Excuse me if I disregard such “advice”, usually backed up by some fervent nitwit with a website and no clue and an inability to spell.

        For various reasons including calculations from scratch, I believe the non plugin hybrid is the best compromise. But since it’s a fool’s game trying to change anyone’s mind with logic these days online, no doubt a used car salesman will advise me of the error of my ways, because their opinion is fact.

        • 0 avatar
          stingray65

          Conundrum – we can’t let facts get in the way of beliefs that EVs are 100% “emission-free”, and all the electricity that we could possibly need can come from sunshine and pleasant breeze.

          Don’t worry, I’m sure that BrandLoyalty will be around shortly to tell you how you are wrong, with links to famous scientists like Al Gore and Leonardo DiCaprio.

        • 0 avatar
          Tele Vision

          For years I’ve stated that a hybrid is the way to go. No plug required. Four motors/one battery pack/one small Diesel engine with direct and detachable drive to one axle. With regenerative braking and a v.1.0 management system this would work in everything from insane sports cars to 4WD one-ton pickups.

  • avatar
    Big Al from Oz

    I read 28 million vehicles were produced in China in 2017. The Chinese government is implementing the reduction of 500 models (yes 500) available from their current manufacturing lineup. This will impact foreign manufacturers.

    The biggest push in China is towards EVs as part of the Committee’s attempt in cleaning the environment.

    The mature OECD markets will move slightly compared to the gyrations in developing economies. It is not impossible to see a large decline in global numbers when there is a global economic downturn.

    As for “most profitable” vehicle market I beg to differ. There are more profitable smaller markets than the US. The US is the largest market through turnover, but lets not forget the $26 billion interest free loan to Ford, the GM/Chrysler bailout a decade ago. If these companies had to pay all this back, well, they’d still be paying.

    • 0 avatar
      stingray65

      Yes we can all breath easy because the Chinese Committee has a very solid plan to reduce vehicle emissions with coal powered EVs.

      The US is far and away the most profitable car market in the world. We have the 2nd highest volume sales (after China), but a much more profitable mix than China. Nothing matches the profitability of US pickups and general mix of large (by world standards) and pricey vehicles. Henry the Deuce Ford was correct when he said “small cars equal small profits”, which is also why Toyota, Honda, Mercedes, Nissan, BMW, and VW have set up shop in the US to make mostly make large and profitable cars, trucks, and SUVs for US consumption and export. The GM and Chrysler bankruptcies were almost entirely due to idiot management, with some helpful contributions from the UAW and the EPA.

      • 0 avatar
        Big Al from Oz

        Stingray,
        What you state appears true. I pointed out volume is the reason for profits in the US.

        As for large vehicle manufacture I agree, but lets not forget those profits a augmented via regulatory controls, barriers and tariffs on certain imported vehicle types. Is it fair to the consumer that prices could be lower in the US if a few changes were made?

        Again, the bailouts and interest free loans helped significantly. The US industry saved billions. Yes they are changing their ways. If the bailouts didn’t occur would the industry be the same now? I would think foreign manufacturers would have a larger slice of the US pie.

    • 0 avatar
      bd2

      It’s not only in improving the quality of air in the major cities, but the leaders in Beijing want China to be the leader in the next-gen technologies (hence, the govt. supporting China’s solar panel industry, etc.).

      • 0 avatar
        stingray65

        Yes it is important to be a world leader in money losing enterprises. There isn’t a solar panel or EV maker in the world that has made an unsubsidized annual profit in the last 10 years.

        • 0 avatar
          mcs

          @stingray: “There isn’t a solar panel or EV maker in the world that has made an unsubsidized annual profit in the last 10 years”

          Hmm, I’m wondering what automaker, EV or Non-EV or whatever, has made an unsubsidized annual profit in the last ten years? Maybe some have? I’m curious. Does anyone have those numbers?

          • 0 avatar
            stingray65

            All the major automakers have made unsubsidized profits during much of the last 10 years. Yes most of them have received some sort of subsidies on for new factories, or “clean vehicle technology development” or EV purchase subsidies, but even after you subtract the value of those subsides there is no doubt that the Toyotas, Hondas, Fords, BMWs, etc. have made profits. In contrast, Tesla has received all kinds of subsidies, and is already in the red before you subtract them out.

          • 0 avatar
            Big Al from Oz

            stingray,
            Each vehicle manufacturered in the US has several thousands of dollars worth of some subsidy, handout or protection.

            The EU is not much different. Don’t you think if all the major vehicle manufacturing nations sat down to formulate a plan to move away from this inane approach we would all be better off?

  • avatar
    Lou_BC

    @Big Al from Oz –
    “Is it fair to the consumer that prices could be lower in the US if a few changes were made?”

    Those in charge of the USA or more specifically, the puppet-masters who pull the strings do not care about what is fair for the end consumer or what is fair to vast swaths of the population. That is readily apparent when one looks at health indices. Life expectancy has dropped in the USA over the past few years. Many other countries that are less wealthy rate much higher in virtually every metric.

    • 0 avatar
      Big Al from Oz

      Lou,
      It amazes me, even in Australia and ever so present by TTAC’s B&B that many don’t like paying taxes or complain about government involvement and even high vehicle prices without ever asking “why is it so?”

      Its great to be Patriotic, whether in Australia, Canada or the US. But at what cost? It seems its easier to blame others, like Mexican or Asian success. Ronnie points out how profitable the US market is (the best). Then obviously Mexican made cars are not an issue if the profits are so great in the US.

      As this story highlights the US had a successful year, as did the rest of the World (mostly).

      How I see it is since the US is such a huge market and successful, why is it not profiting more externally? GM sold off its EU holdings, when the EU was improving. GM had trouble competing with similar OECD economies. This leads me to believe that firing cheap shots at Mexico is uncalled for especially when the US has trouble competing with equals.

      This is why the US needs to restructure. There is plenty of room for industry improvement making it more competive externally.

      • 0 avatar
        DenverMike

        @BAFO – It’s not “trade barriers” limiting our choices, it’s something called “Lemon Laws” that Australia definitely does not have. So you get to enjoy a wide range of junk, many with subpar emissions and crash protection. Lucky you!

        Yes it’s that pesky “Consumer Protection” steering the boats for other coasts, their choice. For reasonable autos, including VW, the US market is the friendliest with the least tariffs to foreign automakers, than ANY meaningful market in the world. No doubt about it, just the bullsh!t doesn’t float..

    • 0 avatar
      stingray65

      Actually, US car prices are by far the lowest in the world when comparing model with comparable model. A stripped BMW or MB with smallest engine and virtually no power accessories is typically the same or higher priced in Germany than a loaded “big engine” version in the US. Historically most countries have taxed the crap out of larger cars or larger engines, originally to protect local automakers from cheap US imports, but more recently for balance of trade (keep oil imports down) or “environmental” reasons. The US also has the richest large block of consumers in the world, as Japan, Germany, and the UK rank somewhere down by Mississippi or Alabama in a comparison of per capita wealth across the 50 states, while China, Mexico, etc. aren’t even in the same planet in terms of wealth. Right now much of the world is very worried that the new lower US corporate will suck a lot of investment money out of their own countries and back to the US, so yes things could be better, but the US is still the best place in the world to be if you like cars.

      • 0 avatar
        Big Al from Oz

        Stingray,
        Your comment relating to how the US has had the cheapest large engine supports the fact the US does favour these. So the US through regulation and import tariffs has created a “cheaper, lower quality” large vehicle market with no real competition. In areas where there is competition the US slammed a 25% tax on imports.

        The US large vehicle is not viable outside of the US in large quanities.

        Outside of the US most large engine vehicles are of better quality. There is no need for US large SUVs, when better vehicles can be had.

        Full size pickups can’t be used in many counties due to tighter roads and from a working truck perspective more economical vehicles do the same or similar work, plus the 25% Pickup tax is used in a retaliatory fashion by other pickup manufacturing competitors.

        The US pickup for the US market is a car/SUV. A large car no different than most mid size pickups in Australia.

        • 0 avatar
          stingray65

          Big Al,
          Actually it is the opposite. The US does not put any special “added” taxes on large engine vehicles, while many other countries in the world do. So it is the other countries that discriminate against large car buyers, not the US discriminating against small car buyers. BMW hardly sells any 3 liter models in Europe for example, but they are quite popular in the US because the tax rate doesn’t jump up between 2 and 3 liters as it does in much of Europe.

          • 0 avatar
            Big Al from Oz

            No, it imposes a 25% tax on all light trucks and vans. Even in overseas markets these tend to have larger engines.

            Even a mid size pickup is a large vehicle. For the US market they would come with similar engines being used in the US market. There are V8 and even 4.8 litre inline pickups globally.

            As for Mustangs and Camaroes they are more or less a niche market, maybe not the Mustamg in Australia at the moment, but the market is only so big for a car that’s better used as a two seater.

  • avatar
    jimmyy

    The sedan vs. CUV debate is dumb. I own a sedan and a CUV. Why? Because if I am going to Home Depot, the CUV can carry the goods home. If I am driving hundreds of miles, the CUV is just dangerous at freeway speeds maneuvers so I take the sedan. I need both vehicles.

  • avatar
    jimmyy

    The sedan vs. CUV debate is dumb. I own a sedan and a CUV. Why? Because if I am going to Home Depot, the CUV can carry the goods home. If I am driving hundreds of miles, the CUV is just dangerous at high speeds maneuvers so I take the sedan. I need both vehicles.

  • avatar
    johnhowington

    clickbait. sorry guys, slightly declining sales and people buying less sedans is only a minor news blip, not some grand conspiracy.


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