Major automakers on Thursday posted a weak finish to 2018 for US new vehicle sales as the industry braced for what is widely expected to be a worse year for sales in 2019. Ford Motor Co reported an 8.8 percent drop in sales for December, with declines in passenger cars, SUVs and pickup trucks.
American consumers have gradually been abandoning passenger cars in favor of larger, more comfortable SUVs and pickup trucks that are far more profitable for automakers. Sales of Ford's F-Series pickup trucks, the top-selling US brand since the 1980s, fell 1.8 percent in December and its SUV sales were off 4.4 percent.
Toyota Motor Corp's December sales dropped 0.9 percent from the same month in 2017. The Japanese automaker posted strong gains in SUV and pickup truck sales, but passenger cars were down 16.5 percent, including its flagship Camry sedan, which slid 32.9 percent.
General Motors Co, which stopped reporting monthly sales last spring, reported a 2.7 percent drop in fourth-quarter sales, with declines for Chevrolet, Cadillac and Buick brands. The No. 1 US automaker also posted drops for some of its more popular larger vehicles, including the Chevrolet Suburban, the Cadillac Escalade and the GMC Yukon, all high-margin SUVs.
GM reported a small decline for its Silverado pickup truck in the fourth quarter as it transitioned to a new, revamped model. The automaker expects industrywide US new vehicle sales to hit 17.3 million units for 2018, a slight increase versus 2017. While analysts have estimated that 2019 will be a down year, automakers were upbeat about the market.
"We are very bullish on pickups heading into 2019," Kurt McNeil, GM's US vice president for sales operations, said in a statement. "We feel confident heading into 2019 because we have more major truck and crossover launches coming during the year and the US economy is strong." Fiat Chrysler Automobiles NV bucked the trend for December, posting a 14 percent increase in sales.
Its key Jeep and Ram brands were up 10 percent and 37 percent, respectively, in December. Ram pickup truck sales were up 34 percent in December. "This year's performance underscores the efforts we undertook to realign our production to give US consumers more Jeep vehicles and Ram pickup trucks," Reid Bigland, FCA's head of US sales, said in a statement. "We see sales remaining solid in 2019." Ford shares were down 0.5 percent at $7.86, FCA dipped 0.5 percent at $14.26 and GM was down 2.6 percent at $32.78.
After a long bull run, US new vehicle sales were expected to drop in 2019 as rising interest rates weigh on sales and translate into higher monthly car payments for consumers. Recent stock market turmoil and uncertainty over the health of the US economy could also add to consumer caution in the short term.
While passenger car sales have fallen rapidly, a pick-up in profitable trucks and SUVs are expected to remain relatively robust despite an overall decline in sales.