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New car sales down again in the US in 2019 – have we reached 'peak car'?

New cars sales have been in a slow but steady decline since 2016, what does that mean for the industry?

1y ago
11.1K

New car sales are down for 2019 with a total of 17.1 million total sales. This is the fifth year that new car sales have topped 17 million units, but could also be the beginning of the end, as many reporters have said that we've reached "peak car".

There are several variables involved in this, but it's important to remember that there is no single reason as to why people aren't buying new cars.

Photo by: @amaruque on Unsplash

Photo by: @amaruque on Unsplash

Let's start with the used car market. Safety technologies and some of the latest high-tech features are now hitting the used car market. I've been looking at a replacement for my ageing Buick Century, and I was beyond surprised to find a long list of vehicles that have automatic emergency braking, adaptive cruise control, and even Apple CarPlay and Android Auto all for the price of a new Civic. This creates an interesting dilemma for automakers, which is why so many dealers are relying on certified pre-owned sales as much as their new car sales.

The next factor comes down to reliability. The average car on the road in the US is 11.8 years old. I know this might cause several existential crises, but that means that the average car on the road is from 2009. Give or take a couple years on either side of that line, but take a look at what is cruising along with on your ride home today and you'll see a bunch of relatively new vehicles. That doesn't necessarily correlate to being reliable, but it does mean that the vehicles that are in our roads have better technology under their hoods to keep them running for longer than ever before.

Photo by: @jordankgraff on Unsplash

Photo by: @jordankgraff on Unsplash

Lastly, we need to address the economy, particularly in the automotive sector. The average new car price in 2019 was just shy of $39,000. That number is only expected to keep rising as more companies shove better technology into longer, wider and lower cars with wheels the size of bicycle rims. That $39,000 gets you a fully loaded Camry, but that number isn't even close to what some entry-level marques are charging for their fully-loaded, three-row SUVs and minivans. $39,000 gets you a heck of a lot farther in the used car market. My mom just bought a 2014 Nissan Pathfinder Platinum with 60,000 miles on it, and a handful of scratches and dings for less than half of that, and now her Chrysler Town and Country gathers dust in the driveway while she is cruising on her 20-inch wheels, with her all-wheel-drive and heated and vented seats.

There are plenty of vehicles that were off to a great start this year, like the Kia Telluride and Hyundai Palisade. Tesla had its strongest year yet, moving nearly 370,000 vehicles. That doesn't excuse the loss of several different American sedans, both small and big, and while many of those buyers shifted focus towards other sedan manufacturers, I can't help but think that a large chunk of them looked toward the used car market as well.

Photo by: @carlesrgm on Unsplash

Photo by: @carlesrgm on Unsplash

While I'm sure people would like to yell in the comment sections about how so-and-so carmaker should make a two-door, hatchback turbodiesel V8 powered, rear-wheel-drive, with a stick to win back sales. But the industry as a whole is down 200,000 sales from the year before. That is no small number by any means, but I don't think that means it's the end of the automotive industry as we know it, not even in ten or twenty years.

I think we will see a series of changes to materials, equipment, and available model ranges that will bring prices down to compete with vehicles on the used car market. Manufacturers don't get to sell the same vehicle twice, and I think that we will begin to see some big changes as automakers start to compete with the ghosts of their pasts.

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Comments (8)

  • As far as I'm concerned it's also a terminological thing in North America, since vehicles like the F-150 are counted as 'trucks' not 'cars'. So the increasing popularity of those ..."things" does not reduce the overall number of vehicles sold (in terms of total capitalization of the market it may even yield an increase), it's just simply people change their sophisticated civil 4-wheelers for monstrous pickups. And it's the big 3 leading the way.

      1 year ago
    • Well no one at least in the states makes a comparable truck except the big 3. I daily drive a ford f350 because I need to tow 10k+ for work very often and the only other trucks that can do that without struggling or breaking would be the chevy...

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        1 year ago
    • No market exists for such heavy pickups in Europe - but people here would probably require a truck driver's license to use them at full towing weight which may come with many extra regulations and compliance issues (tachograph, higher road...

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        1 year ago
  • Awesome article! I work for a auto group in the US and I've noticed a decline in the new car market at our locations. However the rise of the used car market and revenue from that has definitely increased over the last year. I spoke to one of my GMs last month and told me that the total communal area (dealership/ brand wise) were down as a whole.

      1 year ago
  • Great article Kyle! Sorting out new features on an upgraded vehicle is quite a task now. I do wish there was an old engine and wheels only option even though I'm not sure that's what I would necessarily buy.

      1 year ago
  • Millenials aren't buying cars. We're busy paying student debt.

      1 year ago
  • UK new car registrations are at there lowest level as well. It's the lowest its been since 2013. It's due to the stupid Brexit and the fact most newer cars built in the noughties and the 2010's are more reliable than cars built in the 1950-1999 so people are not bothering to change their cars if they still work without issues.

      1 year ago
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