Just How Bad Are Car Sales Going to Get?

Matt Posky
by Matt Posky
just how bad are car sales going to get

As the industry stresses about the new vehicle market taking it easy for the foreseeable future, there’s one aspect of it that’s of particular concern: car sales. After dominating the field for so long, passenger car sales fell below half of the market just a few years ago. That gap continued to widen through 2018.

Automakers responded by shifting output towards utility vehicles and crossovers. Ford ultimately decided to abandon the majority of its passenger cars in the United States as other manufacturers scramble to adjust their lineup to account for consumer tastes. However, these changes are also helping to push shoppers further away from cars. Bank of America Merrill Lynch estimates that 71 percent of vehicle introductions for the 2019 through 2022 model years will be light trucks.

Some automakers still believe cars hold an importance that’s not to be ignored. True, some models still sell incredibly well. But the general assumption is that they’ll continue losing relevance in the coming years. It’s likely to take another energy crisis or major shift in consumer preference to turn back the tide of crossover vehicles.

According to Automotive News, manufacturers are on pace to sell about 5.3 million cars this year, which would be the fewest since 1958. “With so many consumers taking advantage of low fuel costs to test out larger SUVs and trucks — which benefit from significantly better fuel economy than their predecessors — it will be harder and harder to convince anyone who has made a recent truck or SUV purchase that reverting back to a car would make any sense,” explained Ivan Drury, Edmunds senior manager of industry analysis.

Trade-in data from Edmunds shows shoppers are opting to replace cars with another car less and less every year. Just 53 percent of consumers replaced one car with another in the first five months of this year, while roughy 68 percent did so in 2014.

“There’s definitely further growth ahead,” said Jeff Schuster, president of LMC Automotive. He estimates SUVs, crossovers, and pickups will account for 75 to 80 percent of U.S. light-vehicle sales by 2025.

If that sounds hard to believe, trucks and crossovers have already outsell cars by a ratio of more than 2-to-1 in 2018. There’s no reason to think the trend won’t continue for the foreseeable future. “Exactly where the floor is, we’re still sorting it out,” said Stephanie Brinley, senior analyst with IHS Markit.

[Image: Honda]

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  • Whatnext Whatnext on Jul 03, 2018

    Look at that Accord. I parked next to one yesterday and it's rear roofline was as fast as my VW CC's, with the attendant tiny trunk opening and challenging rear seat access. How practical is that for a family vehicle?

  • Lou_BC Lou_BC on Jul 03, 2018

    No cars? As long as I can buy motorcycles and pickups, I'm not loosing sleep.

  • SCE to AUX A plug-in hybrid requires two fuels to realize the benefit of having that design. This is where the Volt fell down.It could be either:[list][*]A very short-range EV[/*][*]A long-range ICE with mediocre fuel economy[/*][*]An excellent mid-range vehicle that required both a plug and gasoline.[/*][/list]If you wanted a short-range EV you got a Leaf (like I did). If you wanted a long-range car with good fuel economy, you got a Civic/Elantra/Cruze/Corolla. In my case, we also had an Optima Hybrid.I'd personally rather have a single-fuel vehicle - either gas/hybrid or electric - rather than combine the complexity and cost of both into one vehicle.
  • Bobbysirhan The Pulitzer Center that collaborated with PBS in 'reporting' this story is behind the 1619 Project.
  • Bobbysirhan Engines are important.
  • Hunter Ah California. They've been praying for water for years, and now that it's here they don't know what to do with it.
  • FreedMike I think this illustrates a bit of Truth About PHEVs: it's hard to see where they "fit." On paper, they make sense because they're the "best of both worlds." Yes, if you commute 20-30 miles a day, you can generally make it on electric power only, and yes, if you're on a 500-mile road trip, you don't have to worry about range. But what percentage of buyers has a 20-mile commute, or takes 500-mile road trips? Meanwhile, PHEVs are more expensive than hybrids, and generally don't offer the performance of a BEV (though the RAV4 PHEV is a first class sleeper). Seems this propulsion type "works" for a fairly narrow slice of buyers, which explains why PHEV sales haven't been all that great. Speaking for my own situation only, assuming I had a place to plug in every night, and wanted something that ran on as little gas as possible, I'd just "go electric" - I'm a speed nut, and when it comes to going fast, EVs are awfully hard to beat. If I was into hypermiling, I'd just go with a hybrid. Of course, your situation might vary, and if a PHEV fits it, then by all means, buy one. But the market failure of PHEVs tells me they don't really fit a lot of buyers' situations. Perhaps that will change as charging infrastructure gets built out, but I just don't see a lot of growth in PHEVs.