US Automobile Industry Suffered a Drop in Sales in 2017, yet remain strong

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The U.S. auto sell’s continual growth of the last 7 years has been hindered in 2017, where the auto sell dropped by 2 percent to 17.2 million.
This is dip in sell has come after 2009.

Although, the overall sell of vehicles is dropped, it is not the same for all auto manufacturers. General Motors, Ford, and Toyota have seen a 1 percent decline compared with 2016. Fiat Chrysler’s sell is dropped by 8 percent. Honda reported sales as flat, whereas Nissan and Volkswagen’s sale rose by 2 and 5 percent respectively.

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

According to Market Analysts, the auto sell will fall a bit further in 2018. There are multiples reasons that can cause this fall. Vehicles are becoming more durable thus consumers can keep them longer. The average on the road age for vehicles is grown from 8.8 years in 1998 to 11.6 years. More and more consumers prefer leasing a vehicles rather than owning it. According to car buying site, Edmunds.com, 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. However, leasing is also has a downside for the auto manufacturers. The increasing flow of old-model cars in market will impact the sale of new vehicles. Also, the rising interest rates are also making people change their minds from buying a new car.

Tax cuts are both boon and bane for automakers. The tax cuts will likely stimulate demand for commercial trucks and vans. As the economy grow, it can be possible that the government with raise interest rates.

According to Kelley Blue Book, although the sales figures are falling 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.