With carmakers pouring incentive money in the market and aiming heavy doses of advertising at consumer, December’s final sales totals should be substantial, according to Edmunds, the automobile shopping service.
In a pre-Christmas sales estimate, Edmunds predicts that carmakers will sell more 4.3 million new cars and trucks will be sold in the U.S. in the fourth quarter of this year. This reflects a 0.3% increase in sales from the third quarter but a 0.8% decrease from Q4 of 2018.
December tends to be the biggest month for car sales, as the top brands sell a combined average of almost 1.7 million vehicles in December, according to research done by ValuePenguin.com, an investing information website.
Edmunds analysts note that the traditional year-end holiday sales events are expected to keep dealerships busy in late December, giving automakers positive momentum heading into 2020. Edmunds analysts predict 2020 will be another solid year for new vehicle sales, estimating new car sales will again total 17.1 million for the full year.
“The fact that new car sales have stayed this strong for this long really defies the odds, especially given that high interest rates and record prices squeezed buyers this year,” said Jeremy Acevedo, Edmunds senior manager of industry insights. “But if 2019 taught us anything, it’s that you can’t underestimate the power of a strong economy.”
Overall, Edmunds analysts estimate 17,145,333 new vehicles will be sold in total in 2019, marking the fifth year in a row that new vehicle sales will top 17 million.
Consumers also solidified their move away from passenger cars in favor of SUVs and trucks, Edmunds analysts said.
In Q4, Edmunds estimates SUVs will garner more than 50% market share for the first time, and market share for pickup trucks will also hover above 19%, a level not seen since 2005. Conversely, market share for passenger cars is expected to hit an all-time low of around 26% in the fourth quarter.
“When there’s been such a long streak of strong sales, it’s natural to wonder when the other shoe will drop, but we don’t see that happening anytime soon,” Acevedo said.
“Financing conditions are already looking much better than they did at the start of 2019, unemployment is at an all-time low, uncertainties around tariffs seem to be somewhat alleviated thanks to the new USMCA agreement, and we’re about to head into an election year, which historically yields stronger sales. Automakers have many reasons to be optimistic heading into the new year,” he said.