US auto consumers tap the brakes, swerve away from small cars

Overall industry sales slightly above expectations, but slowdown expected in 2019

CHICAGO: Major automakers on Thursday announced slowing 2018 sales in the US even as the industry maintained close to its overall total from the previous year, defying expectations.

Overall, the North American auto industry maintained a healthy sales total, boosted by low unemployment and tax cuts. A total of 17.3 million vehicles were sold, about the same as in 2017, according to figures provided by the analytics firm Autodata.

However, many major carmakers struggled to match 2017 sales, signalling US consumers were pulling back, increasingly squeezed by higher interest rates and rising price tags.



Also, Americans' love of larger, and pricier, SUVs and trucks was not enough to offset plummeting sedan and small car purchases.

"We are forecasting sales to slow further in 2019," Cox Automotive Senior Economist Charlie Chesbrough said in a statement. "For some automakers, the slowdown has already begun."

General Motors (GM), the biggest of the US automakers, reported a 2.7% sales dip in the fourth quarter and a 1.6% decline for 2018 - despite selling more crossover SUVs.

Ford also struggled. Sales were down 8.8% in December to end the year 3.5% lower than 2017. It, too, sold more of its larger vehicles, including F-Series pickups.

Another industry giant, Toyota, recorded US sales declines in December and the year - 0.9% and 0.3%, respectively.



FCA US, Fiat Chrysler's US subsidiary, improved its annual total by 9% - fruits of its new focus on larger vehicles. The company's sales rose 14% in the final month of 2018.

The overall industry sales total came in slightly above analysts' expectations, but a slowdown was still expected to come in 2019.

Carmakers were expected to face more challenges, and research firm Edmunds predicted the industry would sell fewer cars - 16.9 million in 2019.

The effects of the tax cuts, especially for businesses buying fleets of cars, were expected to wane. Millions of recently leased cars also were to come back to dealerships and compete with new cars for consumer dollars.

Those challenges were coinciding with rising prices for new vehicles and higher interest rates.