Despite the government shut down that cost the U.S. economy roughly $6 billion since Christmas, according to economists estimates, early indicators suggest new vehicle sales are expected to inch up in January, compared with year-ago results.
However, early indications are that for the start of the year, sales will continue to be strong before sliding off later in the year.
“The current posture of the U.S. economy is strong,” NADA Senior Economist Patrick Manzi said at a press briefing during the NADA Show in San Francisco. “A tight labor market continues to put upward pressure on wages, which are rising. Consumer spending, a significant contributor of GD, remains solid. It’s a positive sign that consumers are spending money.”
That sentiment echoes the predictions of TrueCar’s ALG and Edmunds, both of which expect to see January continue the strong sales automakers enjoyed in November and December 2018.
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TrueCar’s ALG projects total new vehicle sales will reach 1,157,796 units in January, up 0.3% from a year ago. This month’s seasonally adjusted annualized rate (SAAR) for total light vehicle sales is an estimated 17 million units for the month. Excluding fleet sales, U.S. retail deliveries of new cars and light trucks should increase 0.8% to 941,218 units.
Meanwhile, Edmunds analysts forecast is even rosier, with a prediction that 1.16 million new cars and trucks will be sold in the U.S. in January for an estimated seasonally adjusted annual rate or SAAR of 17.2 million, which represents a 28.1% decrease in sales from December 2018, but a 1.3% increase over January 2018.
New vehicle sales finished 2018 strong hitting 17.2 million SAAR but most industry forecasts expect the sales pace to slow somewhat during 2019 with sales hitting around 16.9 million units for the full year.
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Ford, Fiat Chrysler Automobiles N.V., Honda and Hyundai/Kia will see their sales increase when the final numbers for January are tallied, Edmunds predicted, despite the government shutdown, which crippled sales in one major city, Washington D.C.
However, General Motors, Toyota, Nissan and Volkswagen are all expected to give up market share in January. Ford appears to be scoring gains on the strength of its light commercial vehicle sales business and the strong sales of its F-150 pick-up truck. The F-150 has opened up its biggest lead ever over its chief rivals the FCA Ram and Chevrolet Silverado, Ford executives noted last week.
FCA is continuing to ride a boom in Jeep sales, while Honda and Hyundai/Kia appear to have gained ground on the strength of new products. Edmunds also estimates that Tesla will end up selling more than 17,000 units in January and finish the month with 1.5 points of market share.
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Edmunds estimates that retail SAAR will come in at 13.9 million vehicles in January 2019, with fleet transactions accounting for 19.7% of total sales. An estimated 3.1 million used vehicles will be sold in January 2019, for a SAAR of 39.2 million (compared to 2.7 million — or a SAAR of 39.7 million — in December).