A Year in Review: 2019 Auto Sales Totals and 2020 Predictions

It’s official: the book is closed on 2019 and, with it, the entire 2010’s. As we usher in this new decade of automotive development, let’s unpack some end-of-year auto sales totals and take a peek at the newsreel highlights of 2019 so we can better prepare for the good, the bad, and the ugly of 2020 and beyond.

With Ford being the last automaker to release its Q4 and yearly totals, all the numbers are in. And the results? For the fifth consecutive year, U.S. auto sales surpassed 17 million vehicles—barely.

Domestic light-duty vehicle sales came in at 17.1 million, indicating that while the industry more or less reached its target (surpassing Cox Automotive’s 16.8 million sales forecast in January 2019), the market continues to dip—down roughly 1.2% from 2018, per Automotive News numbers.

“Cheap and available credit, low unemployment rates, and healthy consumer sentiment all contributed to a robust market for U.S. auto sales in 2019,” deduces CNBC. But while those trends are more-or-less expected to continue for 2020, Car and Driver wisely points out that “two dozen car brands either fell behind or ended the year with only modest gains—and if 2019’s rash of industry cost-cutting is any indicator, automakers are prepping for a worst-case scenario that has yet to come.”

What Does It All Mean?

Basically, a decline is in the cards. As new vehicles become more durable, lasting longer between trade-ins, they’re also becoming eye-wateringly more expensive. And this, by default, encourages consumers to extend ownership time just a little further, in the hopes of staving off burdensome monthly payments.

For some perspective: Valuation analysts over at Kelly Blue Book put the estimated average transaction price for a light vehicle in the U.S. at $38,948 in December 2019. That’s up 1.7% from the same time last year or an average of roughly $650. Additionally, IHS Markit reports that the average age of a vehicle on U.S. roads is now 11.8 years—an all-time high.

Less vehicles sold but more money spent.

On the bright side though, Automotive News reports that in December, the average interest rate on a new-vehicle loan fell to 5.4%—its third decline in as many months and the lowest it’s been since February 2018. An exceedingly small win, for sure, but still a win.

Prices are up but so is power-of-choice.

According to Car Wars, an annual report by Bank of America Merrill Lynch, OEMs are expected to launch a whopping 246 new models from 2020-2023, at an average of 62 per year. That’s more than 50% above the average number launched in the preceding twenty years (40 models per year from 2000-2019).

“Typically, this level of new model introductions would be a positive sign for the industry,” explains the investment banking division. “However, given softening demand more broadly and crowding into the CUV segment, we believe this product activity creates risk for industry-wide profits.”

Indeed, trucks, SUVs and crossovers took the biggest piece of 2019 auto sales totals, indicating this is what consumers want. But as the arena gets more congested, it becomes seriously difficult to sell off new stock. A fact that dealerships are painfully aware of, as CNBC reports roughly 3.5% of all car sales in July 2019 were 2018 model years—the highest percentage of new car sales of older models since at least 2005.

SUVs are HOT but the Truck Wars rage on.

The decline of passenger cars isn’t surprising. What has been a little unexpected is the drastic increase of pickup truck sales, as well as a changing of the guard among the top three sellers.

Frankly, with the average full-size pickup truck costing around $50,000, it’s amazing anyone is buying new. And yet they are—in droves. While the truck of choice continues to be the Ford F-150, the plucky RAM 1500 outsold the Chevy Silverado for the first time in history—kicking the bowtie badge from its perennial #2 spot.

“Look for more brawls between the two in 2020, as GM fully launches all of its Chevrolet and GMC truck lines and RAM ends production of the previous model that it had been selling alongside the new one,” hints Michelle Krebs, executive analyst at Autotrader.

What Should We Looking for in 2020?

Well, mostly more of the same—with just a touch more anxiety.

Automakers will continue to navigate a global (and domestic) political climate akin to a minefield, as well as unclear trade policy, yo-yoing emissions regulations, and the increasing cost of R&D amid rapidly-progressing technology. All things they seem at least somewhat prepared for, if the past year’s cost-cutting and strategizing indicates anything.

“Automakers have acted like they’re in crisis,” states Car and Driver. “Nissan, Jaguar Land Rover, GM, Ford, Daimler, and Volkswagen began shedding thousands of jobs each during 2019—and they’re still not done. Budgets everywhere have been slashed. More factories closed. China is slowing, and Europe, compounded by a sudden shift from diesel cars, is a thorn.”

Manufacturers will not only face pressure from outside the industry, but inside as well, as they struggle to stand out in a sea of sameness.

Expect to not only see the wave of new models, but also a bump in standard equipment. Safety, tech, comfort, and convenience will continue to improve at every trim and price-point. Luxury crossovers in particular should see this effect, as more premium models launch from OEMs previously absent from the segment, like Lincoln, Cadillac, and Genesis.

To that end, you can expect some unique debuts of all these new models too, as automakers continue to awkwardly ‘exit stage left’ from traditional auto shows in favor of hip, live-streamed product launches, enthusiast-geared events, and clever promotions and giveaways.

Other developments to keep an eye on are the early roll-out of 5G technology, attempts at mainstreaming a bunch of new hybrid and full electric vehicles, a looong road of struggles for Nissan, and possible government oversight of the UAW. And let’s not forget about the FCA-PSA merger, which should inevitably bring EVEN MORE new models as the French look to capitalize on an American auto market.

Looking for a little more insight?

We got you. Check back in a few days for our list of 10 automakers who stole headlines this past year. We’ll explore their 2019 auto sales totals on a closer level and make some predictions for the new year.

Hit the comments below with your own predictions!